The latest Job Openings and Labor Turnover Survey (JOLTS) report showed that job openings rose more than expected in January, while hiring and quits also edged higher. Vacancies increased to 7.740 million, up from December's downwardly revised 7.508 million. The January figure came in above the expected 7.650 million.
From the press release:
The number of job openings was little changed at 7.7 million in January, the U.S. Bureau of Labor Statistics reported today. Hires held at 5.4 million, and total separations changed little at 5.3 million. Within separations, quits (3.3 million) and layoffs and discharges (1.6 million) changed little.
Background on JOLTS (Job Openings and Labor Turnover)
The JOLTS report is a monthly survey released by the BLS that tracks job openings, hiring, and separations (quits, layoffs, and discharges). Unlike the unemployment rate, which measures labor supply, JOLTS data helps gauge labor demand. An increase in job openings is generally a positive sign, indicating ample job opportunities. JOLTS data lags the BLS employment report by one month.
The chart below displays the monthly data for the four components of the JOLTS series. Due to their volatility, six-month moving averages are included to highlight trends. The moving average for job openings remained above hires for over five years starting in 2015. It briefly dipped below hires in May and June 2020 but rebounded above in July 2020. Over the past two years, job openings, hires, and quits have all trended downward, with job openings falling the fastest. During that same time, layoffs and discharges have been gradually increasing.
For comparison, here is the monthly BLS Employment Situation Summary charted with JOLTS data:
In January, there were 7.052 million unemployed workers and 7.740 million job openings. This equates to 1.13 jobs available per unemployed worker in January, up slightly from December.
A Population-Adjusted Perspective on JOLTS
The chart above is based on the actual numbers in the JOLTS report. A more insightful view is as a percentage of non-farm employment, providing a population-adjusted perspective. Below is the adjusted data for four JOLTS components. Each vertical axis is scaled to its high-low range to better highlight individual trends.
JOLTS: Job Openings
Job openings as a percent of nonfarm employment was at 4.9% in January, up from 4.7% in December
The number of job openings was little changed at 7.7 million in January but was down by 728,000 over the year. The job openings rate, at 4.6 percent, changed little over the month. The number of job openings increased in real estate and rental and leasing (+46,000).
JOLTS: Hires
Hires as a percent of nonfarm employment was at 3.4% in January, unchanged from December.
In January, the number and rate of hires were unchanged at 5.4 million and 3.4 percent, respectively. Hires decreased in mining and logging (-6,000).
JOLTS: Quits
Quits as a percent of nonfarm employment was at 2.1% in January, up from 1.9% in December.
In January, the number and rate of quits were little changed at 3.3 million and 2.1 percent, respectively. Quits increased in construction (+53,000) and in mining and logging (+6,000).
JOLTS: Layoffs
Layoffs as a percent of nonfarm employment was at 1.0% in January, down from 1.1% in December.
In January, the number and rate of layoffs and discharges changed little at 1.6 million and 1.0 percent, respectively. Layoffs and discharges decreased in mining and logging (-8,000).
The Business Cycle and JOLTS
Based on the six-month moving averages, we can see that:
- The job openings moving average is above the hires levels.
- Job openings are below their all-time high, trending down, and nearing their pre-pandemic levels.
- Hires are below their all-time high, trending down, and are now below pre-pandemic levels.
- Quits are below their all-time high, trending down, and are now below pre-pandemic levels.
- Layoffs and discharges continue to slowly rise but remain just below pre-pandemic levels.
The relationship between quits and layoffs
Increases in quits suggest employment flexibility and confidence among workers. Quits tend to be inversely correlated with layoffs/discharges, which are associated with economic downturns. From the Great Recession to the COVID pandemic, the quite rate steadily increased while layoffs/discharges declined and then remained stable for years. During the COVID pandemic, layoffs and discharges hit record highs while quits moved in the opposite direction. As the economy rebounded, quits reached an all-time high in March 2022 in what has been called "The Great Resignation" while layoffs/discharges dropped to record lows. Quits have since fallen below pre-pandemic levels, while layoffs and discharges are gradually rising.
It would, of course, be excellent if we had historical JOLTS data stretching back through several business cycles. However, the BLS only began tracking this data in December 2000. The time frame is quite limited compared to the main BLS data series in the monthly employment report, many of which go back to 1948, and the enormously popular non-farm employment (PAYEMS) series goes back to 1939. Nevertheless, there are some clear JOLTS correlations with the most recent business cycle trends.
The JOLTS reports is interesting to watch, but the volatility of the data, which is also subject to revisions, encourages caution in taking the data for any given month very seriously.
Here's our list of monthly employment updates:
Employment Situation Summary
ADP Employment Report
Unemployment Claims
Civilian Labor Force, Unemployment Claims, and the Business Cycle
Long-Term Trends by Age Group
Aging Work Force
Ratio of Part Time and Full-Time Employment
Multiple Jobholders
Workforce Recovery Since Recession
Read more updates by Jen Nash
