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Economy in Brief

U.S. JOLTS: Job Openings Edge Higher; Hiring Weakens
by Tom Moeller  December 17, 2019

The Bureau of Labor Statistics reported that the total job openings rate rose to 4.6% during October from an unrevised 4.4% in September. It remained, nevertheless, below the 4.8% record in January. The job openings rate is the job openings level as a percent of total employment plus the job openings level. The ability to find workers to fill openings weakened as the hiring rate fell to 3.8% from 3.9%. It has been moving sideways since early last year. Employers became less inclined to let workers go. The layoff & discharge rate fell m/m to 1.2% and reversed the prior month's increase. Individuals were ready to seek new positions as the quits rate held m/m at 2.3% and has been trending higher for ten years.

The private-sector job openings rate rose m/m to 4.8%, but remained below the high of 5.2% twelve months earlier. In professional & business services, the rate fell sharply to 5.2% and remained below January's 6.5% high. In leisure & hospitality, the rate fell to 5.4% and remained down versus December's high of 6.2%. In education & health services, the rate increased to 5.0%, but also remained below earlier highs. In trade, transportation & utilities, the rate increased to 5.0%, a nine-month high. The openings rate fell to 4.0% in the construction sector and remained below the record 5.5% reached in April. In manufacturing, the rate improved slightly to 3.6%. The government sector job openings rate edged higher to 3.2% and remained well above the 2009 low of 1.2%.

The level of job openings rebounded m/m by 3.3% (-4.3% y/y) but has been declining since January's high. It remained near the lowest level since March of last year. Private-sector openings fell 6.2% y/y, but government sector job openings increased 16.8% y/y.

Hiring activity weakened in October. The private-sector hiring rate slipped to 4.2% and remained below July's expansion high of 4.4%. The rate in leisure & hospitality dropped sharply to 6.5%, its lowest level since February. In professional & business services, the hiring rate fell sharply to 5.3% and remained below the June 2017 high of 6.1%. The construction sector's hiring rate strengthened m/m to 6.4%. The hiring rate in trade, transportation & utilities fell to `3.9% and in education & health services the rate held steady at 2.9%. In manufacturing, the hiring rate eased to 2.5%, but remained below the July 2018 high of 3.1%. The hiring rate in government was unchanged at 1.6%.

Total hiring declined 3.1% (-1.9% y/y) after a 1.1% September rise. Hiring in the private sector fell 3.5% (-2.0% y/y). Government sector hiring rose 2.0%, but was unchanged y/y.

Individuals became less ready to find new work. The overall job separations rate fell to 3.7%, just below the expansion high. The private sector separations rate fell to 4.1%. The separations rate in government rose slightly to 1.6%.

The total level of separations slipped 0.1% y/y as private sector separations eased 0.2% y/y. The decline reflected a 2.8% y/y drop in professional & business services separations and separations in trade, transportation & utilities fell 11.0% y/y. Separations in manufacturing fell 11.1% y/y and reversed September's rise. In educational and health services, separations rose 0.3% y/y. Separations in leisure & hospitality rose 1.6% y/y. The construction sector saw a one-third y/y increase in separations. Separations in the government sector rose 1.4% y/y.

Confidence in finding work improved last month. The level of quits rose modestly after two months of decline and they remained up 1.2% y/y. The quits rate held steady m/m at 2.3%, and was sharply higher versus 1.3% at the beginning of the expansion. The private-sector quits rate rose to 2.6% and has increased from 1.4% since the fall of 2009. The government sector quits rate of 0.8% held steady m/m, but was double the rate at the beginning of the economic expansion.

The level of layoffs reversed its earlier monthly increases and fell 4.6% y/y. In the private sector, layoffs declined 4.9% y/y as the layoff rate retreated to 1.3%. It remained below the 2009 high of 2.2%. Layoffs declined 1.6% y/y in the government sector and the layoff rate was 0.5%.

The Job Openings & Labor Turnover Survey (JOLTS) dates to December 2000 and the figures are available in Haver's USECON database.

JOLTS (Job Openings & Labor Turnover Survey, SA) Oct Sep Aug Oct'18 Oct'17 Oct'16
Job Openings, Total
 Rate (%) 4.6 4.4 4.6 4.8 4.2 3.7
 Total (000s) 7,267 7,032 7,301 7,593 6,405 5,616
Hires, Total
 Rate (%)  3.8 3.9 3.9 3.9 3.8 3.6
 Total (000s) 5,764 5,951 5,884 5,877 5,587 5,177
Layoffs & Discharges, Total
 Rate (%) 1.2 1.3 1.2 1.2 1.2 1.1
 Total (000s) 1,769 1,971 1,812 1,855 1,803 1,637
Quits, Total
 Rate (%) 2.3 2.3 2.4 2.3 2.2 2.1
 Total (000s) 3,512 3,471 3,601 3,469 3,209 3,105
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