Article

May 2013

Job openings continue to grow in 2012, hires and separations less so

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Job openings by industry and region. On an annual basis, the total nonfarm average monthly job openings rate rose from 2.3 percent in 2011 to 2.6 percent in 2012. Real estate and rental and leasing saw the largest percent increase in the average monthly job openings rate, a 33.3-percent rise, from 2.1 percent to 2.8 percent over the year. Next was nondurable goods manufacturing, which grew 31.3 percent, from 1.6 percent to 2.1 percent. The rate declined the most in mining and logging, which posted a 39.4-percent drop over the year, from 3.3 percent to 2.0 percent. Information was next, falling 7.9 percent, from 3.8 percent to 3.5 percent. Table 2 shows the average monthly number of job openings and the average rate of job openings, by industry, for 2011 and 2012.

Table 2. Average monthly number of job openings(1) and average monthly rate of job openings,(2) by industry, not seasonally adjusted, 2011 and 2012
IndustryNumber (thousands)Rate (percent)
20112012ChangePercent change20112012ChangePercent change

Total

3,1513,63248115.32.32.60.313.0

Total private

2,8213,25143015.22.52.8.312.0

Mining and logging                

2618–8–3.83.32.0–1.3–39.4

Construction                        

758168.01.31.4.17.7

Manufacturing                      

2272714419.41.92.2.315.8

Durable goods                      

1571761912.12.12.3.29.5

Nondurable goods                    

71952433.81.62.1.531.3

Trade, transportation, and utilities          

5406157513.92.12.4.314.3

Wholesale trade                    

1121311917.02.02.3.315.0

Retail trade                        

3163715517.42.12.4.314.3

Transportation, warehousing, and utilities  

1121131.92.32.2–.1–4.3

Information                        

10497–7–6.73.83.5–.3–7.9

Financial activities                    

2032403718.22.63.0.415.4

Finance and insurance              

1621832113.02.73.0.311.1

Real estate and rental and leasing        

41571639.02.12.8.733.3

Professional and business services        

5896768714.83.33.6.39.1

Education and health services                

57567610117.62.83.2.414.3

Educational services                

62620.01.91.8–.1–5.3

Health care and social assistance        

51361310019.53.03.5.516.7

Leisure and hospitality                    

3624387621.02.63.1.519.2

Arts, entertainment, and recreation        

4655919.62.32.7.417.4

Accommodations and food services      

3163836721.22.73.2.518.5

Other services                        

1191402117.62.22.5.313.6

Government                              

3303815115.51.51.7.213.3

Federal                          

53661324.51.82.3.527.8

State and local                          

2773143713.41.41.6.214.3

Notes:

(1) The average number of monthly job openings is the average number of job openings on the last business day of each month during the year.
(2) The average rate of monthly job openings is the average number of job openings on the last business day of the month during the year, as a percentage of average employment plus the average number of job openings.
Source: U.S. Bureau of Labor Statistics.

In 2012, the West’s average monthly job openings rate was unchanged from 2011. The other three regions’ rates increased between those years. As the following tabulation shows, of the four regions,6 the South experienced the highest increase in its average monthly job openings rate, moving from 2.3 percent in 2011 to 2.8 percent in 2012 (see also chart 2):
Job openingsNortheastSouthMidwestWest  
Number (thousands):      
20115741,144697736  
20126581,417801756  
Change, 2011–20128427310420  
Percent change, 2011–201214.623.914.92.7  
Rate (percent):      
20112.32.32.32.5  
20122.52.82.62.5  
Change, 2011–2012.2.5.3.0  
Percent change, 2011–20128.721.713.0.0  
 
Job openings and unemployment. The ratio of unemployed people7 per job opening changes over time. (See chart 3.) In 2012, the ratio decreased from 3.7 in January to 3.4 in December. The ratio has declined since the end of the recession in June 2009, when it was 6.2; however, it still has not fallen to the 1.8 level at which it stood at the beginning of the recession, in December 2007.
The Beveridge curve highlights the inverse relationship between unfilled labor demand (as measured by the job openings rate) and unused labor supply (as measured by the unemployment rate) over time. The curve shows the job openings rate and the unemployment rate by month. (See chart 4.) The curve is downward sloping and reflects the state of the economy in two ways: through movements along the curve or through shifts in the curve toward or away from the origin. The combination of a high number of job openings and low unemployment is seen in an economic expansion and results in a position high and to the left on the graph. The combination of a low number of job openings and high unemployment results in a position low and to the right on the graph. Greater differences between the job openings rate and the unemployment rate cause the curve to shift outward from the origin. When job matching is inefficient, unemployment is high and more job openings are left unfilled. In 2012, the points on the Beveridge curve moved slightly upward and to the left as the job openings rate went from 2.5 percent in January to 2.6 percent in December while the unemployment rate went from 8.3 percent in January to 7.8 percent in December.
From the start of the recent recession, in December 2007, through the middle of 2009, the economy’s position along the Beveridge curve moved lower and further to the right as the job openings rate declined and the unemployment rate rose. The lowest point on the curve, reflecting the JOLTS job openings series low of 1.6 percent, was in July 2009, while the furthest point to the right occurred in October 2009, when the unemployment rate was 10.0 percent. During 2010, the points on the curve shifted outward. In 2012, as in 2011, the points on the curve continued to stay in this new position. There has been debate among economists as to whether the shift is due to structural or cyclical factors.8

Definitions of JOLTS terms

Job openings are the number of openings on the last business day of the reference month.

Hires are all additions of personnel to the payroll during the reference month.

Total separations are the number of employees separated from payroll during the reference month.

Quits are separations in which employees left a job voluntarily but did not retire or transfer.

Layoffs and discharges are involuntary separations initiated by employers.

Other separations are separations due to retirement, transfers, or deaths and separations caused by disability.

Beveridge curves also can be calculated for the four regions, with the use of JOLTS and Local Area Unemployment Statistics data.9 In 2012, the Beveridge curve for the Northeast moved upward and slightly to the right as the job openings rate rose from 2.2 percent in January to 2.5 percent in December while the unemployment rate grew from 8.0 percent in January to 8.1 percent in December. The Beveridge curve for the South moved slightly downward and to the left, with the job openings rate dropping from 2.8 percent in January to 2.7 percent in December and the unemployment rate falling from 8.0 percent in January to 7.3 percent in December. The Beveridge curve for the Midwest moved upward and to the left as the job openings rate increased from 2.5 percent in January to 2.7 percent in December while the unemployment rate fell from 7.6 percent in January to 7.2 percent in December. The Beveridge curve for the West moved up and to the left, with the job openings rate rising from 2.2 percent in January to 2.5 percent in December while the unemployment rate dropped from 9.7 percent in January to 8.6 percent in December.

In the first half of 2010, all of the regional Beveridge curves shifted outward, as did the national curve; however, they all shifted in various ways and degrees and continued to develop differently during the recovery. (See chart 5.) In the Midwest, although the initial shift in the curve was not as large as that in the other regions, by 2012 the curve had moved farther out on the grid. By contrast, the West experienced a large initial shift in its curve, but in 2012 the curve moved closer to its 2010 location, exhibiting an increase in job-matching efficiency.

Hires and separations

Hires, along with separations, demonstrate another important aspect of the labor market: worker flow. (See charts 6 and 7.) The number of hires is a procyclical measure, rising during an expansion and falling during a recession. The separations measure is more complex. There are three elements within separations: quits, layoffs and discharges, and other separations. Quits, which are voluntary separations, are a procyclical measure; layoffs and discharges, which are involuntary separations, constitute a countercyclical measure. That is, during an expansion, more people quit their jobs and fewer people are laid off. During a recession, more people are laid off and fewer people quit their jobs. These two elements countering each other, but with quits usually predominating, make separations overall a mildly procyclical measure.10 (See chart 8.) The last element within separations, other separations—which include separations due to retirement, death, and disability, as well as transfers to other locations of the same firm—tends to be procyclical. However, because of its smaller size relative to the other two components of separations, the category of other separations tends not to have a large impact on total separations. (See chart 9.)

Notes

6 The U.S. Census Bureau defines the four regions of the United States as follows: Northeast—Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont; South—Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia; Midwest—Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin; West—Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming. This listing applies to all tabulations that follow showing estimates for the U.S. regions.

7 For data on unemployment, see “Labor force statistics from the Current Population Survey” (U.S. Bureau of Labor Statistics, published monthly), http://www.bls.gov/cps.

8 See, for example, Ed Crooks, “German giant says U.S. workers lack skills,” Europe News (CNBC, June 20, 2011), http://www.cnbc.com/id/43459947; and Rand Ghayad and William Dickens, “It’s not a skill mismatch: disaggregate evidence on the U.S. unemployment–vacancy relationship,” VOX, Jan. 5, 2013, http://www.voxeu.org/article/it-s-not-skill-mismatch-disaggregate-evidence-us-unemployment-vacancy-relationship.

9 For data on local area unemployment, see “Local Area Unemployment Statistics” (U.S. Bureau of Labor Statistics), http://www.bls.gov/lau.

10 For a discussion of hires, separations, and their procyclicality, see Caryn N. Bruyere, Guy L. Podgornik, and James R. Spletzer, “Employment dynamics over the last decade,” Monthly Labor Review, August 2011, pp. 16–29, especially p. 23, http://www.bls.gov/opub/mlr/2011/08/art2full.pdf.

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About the Author

Kendra C. Hathaway
hathaway.kendra@bls.gov

Kendra C. Hathaway is an economist in the Office of Employment and Unemployment Statistics, Bureau of Labor Statistics.