Job Openings & Labor Turnover: Clues to the Business Cycle

The latest JOLTS report (Job Openings and Labor Turnover Summary), with data through January, is now available. From the press release:

The number of job openings rose to 7.0 million (+411,000) on the last business day of January, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and separations were little changed at 5.8 million and 5.6 million, respectively. Within separations, the quits rate was unchanged at 2.3 percent and the layoffs and discharges rate was little changed at 1.1 percent. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector, by industry, and by four geographic regions. The release also includes 2019 annual estimates for hires and separations. The annual number of hires at 69.9 million and the annual number of quits at 42.1 million increased in 2019. The annual number of layoffs and discharges at 21.7 million edged down in 2019.

Job openings, hires, and separations have been revised to incorporate the annual updates to the Current Employment Statistics employment estimates and the JOLTS seasonal adjustment factors.

The first chart below shows four of the headline components of the overall series, which the BLS began tracking 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 Nonfarm Employment (PAYEMS) series goes back to 1939. Nevertheless, there are some clear JOLTS correlations with the most recent business cycle trends.

The chart below shows the monthly data points four of the JOLTS series. They are quite volatile, hence the inclusion of six-month moving averages to help identify the trends. For the last five years, the moving average for openings has been above the hires levels as seen in the chart below.

JOLTS Overview