Job openings continue to grow in 2012, hires and separations less so
|Year||Number of hires||Percent change from previous year||Annual hires rate|
(1) The JOLTS program did not begin until 2001, so there are no data for the previous year.
Since the end of the recession, the number of hires has been trending upward, from 3.6 million in June 2009 to 4.2 million in December 2012. The number has yet to rise to the 5.0 million level at which it stood at the beginning of the recession, in December 2007.
1. Hires by industry and region. Table 4 gives the annual number of hires and the annual rate of hiring, by industry, for 2011 and 2012. Most industries experienced an increase in their annual hires rate from 2011 to 2012. The total nonfarm annual hires rate rose from 37.8 percent in 2011 to 38.9 percent in 2012. The industries with the greatest percent decreases in their annual hires rate were educational services, which fell 8.6 percent, from 29.0 percent in 2011 to 26.5 percent in 2012, and nondurable goods, which dropped by 7.4 percent, from 28.4 percent in 2011 to 26.3 percent in 2012. The industries with the greatest increases in their annual hires rate were finance and insurance, which grew by 17.1 percent, from 20.5 percent in 2011 to 24.0 percent in 2012, and financial activities, which rose 14.1 percent, from 24.1 percent in 2011 to 27.5 percent in 2012.
|Industry||Number (thousands)||Rate (percent)|
|2011||2012||Change||Percent change||2011||2012||Change||Percent change|
Mining and logging
Trade, transportation, and utilities
Transportation, warehousing, and utilities
Finance and insurance
Real estate and rental and leasing
Professional and business services
Education and health services
Health care and social assistance
Leisure and hospitality
Arts, entertainment, and recreation
Accommodations and food services
State and local
(1) The annual number of hires is the total number of hires during the entire year.
|Percent change, 2011–2012||1.5||8.7||.9||4.0|
|Percent change, 2011–2012||.0||6.8||–.8||2.1|
2. Hires and job openings. Typically, the average monthly hires rate exceeds the average monthly job openings rate. The reason is that the job openings rate is a stock measure, meaning that it is measured only at a point in time (the last business day of the month) rather than on an accumulating flow basis. In contrast, the hires rate is a flow measure covering every person hired during the month. As expected, in 2012 the total nonfarm average monthly hires rate, 3.2 percent, exceeded the average monthly job openings rate, 2.6 percent. However, in some industries the hires rate did not exceed the job openings rate. (See chart 10.) There may be various reasons for this reversal. For example, employers in these industries may be having difficulty finding workers with the qualifications they want at the wage they are offering. Alternatively, employers could be hesitant about filling a vacancy because they have doubts about the state of the economy.
Another way to gauge potential unmet labor demand in different industries is through the stock-flow vacancy–yield ratio, the ratio of hires to job openings. This measure can provide valuable insight into the labor market over time.11 For example, in December 2012 there were 4,195,000 hires and 3,612,000 job openings, so the vacancy–yield ratio for that month and year was 1.16 (4,195,000/3,612,000).
The vacancy–yield ratios for construction and for arts, entertainment, and recreation often are the most affected by the business cycle. Because of monthly fluctuations in the data, seasonally adjusted quarterly estimates are used. In the first quarter of 2012, construction had 4.04 hires per job opening and arts, entertainment, and recreation had 2.66 hires per job opening. Both ratios decreased by the fourth quarter, to 3.38 and 2.27 hires per job opening, respectively. This trend matches the 2012 total nonfarm trend, which showed a decrease from 1.22 hires per job opening in the first quarter to 1.17 hires per job opening in the final quarter. (See chart 11.)
Separations. In 2012, the number of workers separated from their jobs, or, simply, number of separations, during the year began to increase, after having leveled off the previous year. The annual number of separations rose 4.3 percent, from 47.6 million in 2011 to 49.7 million in 2012. By contrast, in 2011 the annual number of separations held steady at its 2010 level of 47.6 million. (See table 5.) On a quarterly basis, the number of separations was up 2.1 percent in the first quarter of 2012, up 4.7 percent in the second quarter, down 3.8 percent in the third quarter, and down 0.4 percent in the final quarter. The number of separations stood at its 2012 low of 3.9 million in January and reached a yearly high of 4.4 million in May. Table 6 presents the annual number of separations and the annual rate of separations, by industry, for 2011 and 2012.