U.S. job openings rate on the rise; hires and separations rates unchanged

There were 3.0 million job openings on the last business day of July 2010, the U.S. Department of Labor’s Bureau of Labor Statistics reported on September 9. The job openings rate increased over the month to 2.3 percent. The hires rate (3.3 percent) and the separations rate (3.4 percent) were unchanged. This release includes estimates of the number and rate of job openings, hires, and separations for the total non-farm sector by industry and geographic region.

Job Openings
The number of job openings in July was 3.0 million, which was little changed from June. Although the month-to-month change is small, the number of job openings has risen by 704,000 (30 percent) since the most recent series trough of 2.3 million in July 2009. Even with the gains since July 2009, the number of job openings remained below the 4.4 million open jobs when the recession began in December 2007 (as designated by the National Bureau of Economic Research). The number of job openings in July (not seasonally adjusted) increased from 12 months earlier for total non-farm and total private. The job openings level increased in many industries and in all of the regions.

Hires
In July, the hires rate was unchanged for total non-farm at 3.3 percent. There were 4.2 million hires in July for total non-farm, 378,000 (10 percent) higher than its most recent trough in June 2009. Hires remain below the 5.0 million hires in December 2007 when the recession began. The hires level in July was little changed for all industries and regions.

Over the 12 months ending in July, the hires rate (not seasonally adjusted) was little changed for total non-farm, total private and government. The hires rate increased over the past 12 months in durable goods manufacturing and retail trade and decreased in other services. In the Midwest region, the hires rate increased.

Separations
Total separations includes quits (voluntary separations), layoffs and discharges (involuntary separations), and other separations (including retirements). The total separations, or turnover, rate in July was little changed for total non-farm and total private but decreased for government. Over the 12 months ending in July, the total separations rate (not seasonally adjusted) was little changed for total non-farm and total private but increased for government.

The quits rate can serve as a measure of workers’ willingness or ability to change jobs. In July, the quits rate remained unchanged at 1.5 percent for total non-farm and 1.7 percent for total private and was little changed in every industry. The number of quits for total non-farm fell by 1.4 million between the November 2006 peak and the September 2009 trough. Since September 2009, the number of quits has risen by 231,000.

Over the 12 months ending in July, the quits rate (not seasonally adjusted) was little changed for total non-farm, total private and government. The quits rate increased over the 12 months ending in July in retail trade, professional and business services, and educational services as well as the Northeast region.

The layoffs and discharges component of total separations is seasonally adjusted at the total non-farm, total private and government levels. The layoffs and discharges rate was unchanged in July for total non-farm and total private but decreased for government. The number of layoffs and discharges for total non-farm peaked at 2.6 million in January 2009, falling to 2.1 million in July 2010. In government, the number of layoffs and discharges in July (262,000) was higher than when the recession began (117,000) due to the release of temporary Census 2010 workers.

The layoffs and discharges level (not seasonally adjusted) declined over the 12 months ending in July for total non-farm and total private, but increased for government. The layoffs and discharges level rose sharply over the year in federal government reflecting the layoffs of temporary Census 2010 workers. In many industries, the layoffs and discharges level declined. The layoffs and discharges level decreased over the year in the West region.

The other separations series is not seasonally adjusted. In July, there were 440,000 other separations for total non-farm, 315,000 for total private, and 124,000 for government. Compared to July 2009, the number of other separations increased for total non-farm and government but was little changed for total private. The rise in government other separations is due to state and local government where other separations rose from 82,000 in July 2009 to 111,000 in July 2010.

Relative Contributions to Separations
The total separations level is influenced by the relative contribution of its three components – quits, layoffs and discharges, and other separations. The percentage of total separations at the total non-farm level attributable to the individual components has varied over time, but for the majority of the months since the series began in December 2000, the proportion of quits has exceeded the proportion of layoffs and discharges. Other separations is historically a very small portion of total separations; it has rarely been above 10 percent of the total.

Since February 2010, the proportions of quits and layoffs and discharges have been close. In July 2010, the proportion of quits was 44 percent and the proportion of layoffs and discharges was 48 percent for total non-farm. For total private, the proportions were 46 percent quits and 47 percent layoffs and discharges. For government, the proportions were 26 percent quits and 57 percent layoffs and discharges.