BLS report: Job openings up 3%, hires decline 3.5%

The job openings rate increased in August, while the hires rate decreased and the total separations rate remained essentially unchanged, the U.S. Department of Labor’s Bureau of Labor Statistics reported on October 11. 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
On the last business day of August 2006, there were 4.1 million job openings in the United States and the job openings rate was 3.0 percent. The job openings rate increased over the month to the highest level since April 2001, after showing little change since November 2005. In August, the job openings rates increased in trade, transportation, and utilities and in three of the four regions – the Midwest, South and West. There were no significant over-the-month decreases in the job openings rate in any industry or region. The industries with the highest seasonally adjusted job openings rates in August 2006 were professional and business services (3.8 percent), leisure and hospitality (3.7 percent), and education and health services (3.6 percent).

Over the year, the job openings rate rose in many of the private sector industries, in federal government, and in three of the four regions (Midwest, Northeast and South). The job openings rate did not decline significantly over the year in any industry or region.

Hires
The hires rate decreased to 3.5 percent in August. Hires are any additions to the payroll during the month. In August, the hires rate rose in government and fell in professional and business services and in the Midwest and Northeast regions. The seasonally adjusted hires rate was highest in the leisure and hospitality industry (6.1 percent).

From August 2005 to August 2006, the hires rate increased in state and local government and decreased in other services and in the Northeast region.

Separations
The total separations, or turnover, rate was little changed at 3.2 percent in August. Separations are terminations of employment that occur at any time during the month. In August, the total separations rate increased in the West Region but in none of the industries. The rate declined in government and in the Midwest and Northeast regions.

Total separations include quits (voluntary separations), layoffs and discharges (involuntary separations), and other separations (including retirements). The quits rate, which can serve as a barometer of workers' ability to change jobs, was unchanged at 1.9 percent in August. Over the month, the quits rate did not change significantly in any industry or region. In August, the seasonally adjusted quits rate was the highest in the leisure and hospitality industry (4.2 percent), which also had the highest hires rate.

Over the year, the quits rate grew in educational services and in state and local government. The quits rate declined in construction, retail trade, other services and the Northeast.

The other two components of total separations – layoffs and discharges, and other separations – are not seasonally adjusted.  From August 2005 to August 2006, the layoffs and discharges rate decreased to 1.2 percent.

For August 2006, the arts, entertainment, and recreation industry had the highest layoffs and discharges rate (2.6 percent). From August 2005 to August 2006, the other separations rate was little changed at 0.2 percent.

Flows in the labor market
Hires and separations data help show dynamic flows in the labor market. Over the 12 months ending in August 2006, hires have averaged 4.8 million per month and separations have averaged 4.5 million per month (not seasonally adjusted). The comparable figures for the prior 12-month period were also 4.8 million hires and 4.5 million separations.