Job openings continue to grow in 2012, hires and separations less so
At the end of 2012—42 months after the recession—job openings, hires, and separations had not yet reached their prerecession levels and rates; all three measures, however, had levels higher than they had the previous year.
JOLTS breaks down separations into quits, layoffs and discharges, and other separations. In 2012, quits contributed the most to the increase in separations. The average monthly number of quits increased from 1.9 million in 2011 to 2.1 million in 2012. The average monthly number of layoffs and discharges remained stable at 1.7 million between the 2 years.
JOLTS data provide measures of job openings, hires, total separations, quits, layoffs and discharges, and other separations on a monthly basis by industry1 and geographic region.2 JOLTS gauges labor demand and worker flows by collecting data from a sample of approximately 16,400 nonfarm business establishments. This article reviews changes in the estimates generated by the JOLTS measures over 2012, as well as how these measures have fared since the most recent recession. To do so, 2012 JOLTS data are compared with previous years’ JOLTS data as well as other statistical series. JOLTS data are available beginning December 2000. In what follows, monthly averages or annual totals, neither of which are seasonally adjusted, are presented. Data for a specific month (e.g., December 2012) or quarter (e.g., the second quarter of 2012) are seasonally adjusted.
Job openings—the number of openings on the last business day of the reference month—are a procyclical measure of the demand side of the labor market. That is to say, during an economic contraction employers tend to demand less labor, reducing the number of job openings they have or shedding them entirely. As labor demand decreases, employment also tends to decrease. By contrast, during an economic expansion employers tend to demand more labor, increasing the number of job openings they have. As labor demand rises, employment tends to rise. All in all, then, job openings and the Current Employment Statistics (CES)3 nonfarm payroll employment estimates tend to have similar growth trends.4 (See chart 1.)
In 2012, as well as in 2011, the total number of nonfarm job openings and nonfarm payroll employment tracked consistently. On an annual basis, the average monthly number of job openings increased 15.3 percent in 2012, from 3.2 million to 3.6 million. By way of comparison, in 2011 the average monthly number of job openings grew 10.6 percent. Similarly, nonfarm payroll employment showed a positive, increasing percentage of growth for both years. In 2012, average monthly CES employment rose by 1.7 percent over the 2011 figure. The increase in 2011 was 1.2 percent. (See table 1.)
|Year||Average monthly number of job openings||Percent change from previous year||Average monthly CES employment||Percent change from previous year|
(1) The JOLTS program did not begin until 2001, so there are no data for the previous year.Source: U.S. Bureau of Labor Statistics.
On a quarterly basis, in 2012 the number of job openings was up 10.0 percent in the first quarter, up 2.8 percent in the second quarter, down 3.2 percent in the third quarter, and up 2.9 percent in the final quarter. The low for the year was 3.4 million, in January, the high 3.8 million, in March.
Following the recession,5 total nonfarm job openings trended upward, from 2.4 million in June 2009 to 3.6 million in December 2012. The number of openings still has not reached the 4.3 million level at which it stood at the beginning of the recession, in December 2007.
1 The term “industry” can refer to a supersector, sector, or subsector, depending on the context. In analyzing industries, the JOLTS program follows the North American Industrial Classification System.
2 The most detailed geographical breakout the jolts sample can provide is by region: Northeast, South, Midwest, and West.
4 Richard L. Clayton, James R. Spletzer, and John C. Wohlford, “Conference Report: JOLTS Symposium,” Monthly Labor Review, February 2011, pp. 41–47, http://stat.bls.gov/opub/mlr/2011/02/art4full.pdf, especially p. 44.