The latest JOLTS report (Job Openings and Labor Turnover Summary), with data through April, is now available. From the press release:
The number of total separations decreased by 4.8 million to 9.9 million in April, the U.S. Bureau of Labor Statistics reported today. Despite the over the month decline, the total separations level is the second highest in series history. Within separations, the quits rate fell to 1.4 percent and the layoffs and discharges rate decreased to 5.9 percent. Job openings decreased to 5.0 million on the last business day of April. Over the month, hires declined to 3.5 million, a series low. The changes in these measures reflect the effects of the coronavirus (COVID-19) pandemic and efforts to contain it. 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 geographicregions.
Coronavirus (COVID-19) Pandemic Impact on April 2020 JOLTS Data
Data collection for the Job Openings and Labor Turnover Survey was affected by the coronavirus (COVID-19) pandemic. More information is available at the end of this news release and www.bls.gov/covid19/job-openings-and-labor-turnover-covid19-april-2020.htm.
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.
For comparison, here is the monthly BLS Employment Situation Summary charted with JOLTS data:
A Population-Adjusted Perspective on JOLTS
The chart above is based on the actual numbers in the JOLTS report. A better way to view the numbers is as a percent of Nonfarm Employment, which essentially gives us a population-adjusted version of the data. Here is that adjustment for four of the JOLTS series. Note that the vertical axis for each is optimized for the high-low range to facilitate an understanding of the individual trends.
Where Are We Now in the Business Cycle?
Based on the six-month moving averages, we can see that:
- Openings are below their record high and the moving average has been above the hires levels for the last five years.
- Hires are below their post-recession peak (as of February).
- Quits are around levels of the last recession.
- The Layoffs and Discharges series is at its all-time high.
The Trend in Quits
To reiterate a previous point: Increases in Quits suggest employment flexibility. Quits tend to be inversely correlated with Layoffs & Discharges, which are associated with business cycle weakness. Following the last recession, Quits began increasing in 2010, and the rate accelerated in 2013 and has continued to rise. Layoffs & Discharges fell post-recession and leveled out for a few years. Due to the COVID-19 pandemic, layoffs and discharges are seeing an all-time high.
It would, of course, be excellent if we had historical JOLTS data stretching back through several business cycles. But alas we do not.
The JOLTS reports will be interesting to watch in the months ahead. But the volatility of the data, which is also subject to revisions, encourages caution in taking the data for any given month very seriously.
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