One month after the BLS reported that according to last month’s JOLTS survey, the number of job openings soared from 5.667 million, a six-month low which spooked analysts into wondering if the labor market is peaking, to 6.312 million, a 645,000 monthly increase and the second biggest monthly jump on record, the latest, just released JOLTS report predictably showed a sharp contraction, as the number of job openings dropped from a downward revised 6.228 million to 6.024 million, a drop of 176K, as the series becomes increasingly volatile.
The job openings rate dropped from 4% to 3.9%, while the number of job openings edged down for total
private and was little changed for government. Job openings increased in a handful of industries, including finance and insurance (+69,000) and state and local government education (+31,000); openings decreased in a greater number of industries with the largest decreases being in accommodation and food services (-91,000), construction (-56,000), and wholesale trade (-38,000). The number of job openings decreased most in the West region.
It wasn’t just job openings that dropped: total hires declined as well, sliding from a revised 5.574 million in January to 5.507 million in February, still just shy of the highest print on record which was last October’s 5.609 million. The
number of hires was little changed for total private and for government. Hires decreased in educational services (-48,000). The number of hires was little changed in all four regions.
Meanwhile, the other closely watched category, the level of quits – which indicates workers’ confidence they can leverage their existing skills and find a better paying job, also known as the “take this job and shove it” indicator- reversed last month’s decrease and in february rose modestly from 3.191MM to 3.210MM, suggesting workers were feeling just a more less confident about demand for their job skills than the previous month. t. Quits decreased in other services (-41,000). The number of quits was little changed in all four regions
And with a total 5.2 million separations (a 3.5% rate), this means that there were 1.6 million layoffs and discharges in February, virtually unchanged from January. The layoffs and discharges rate was 1.1 percent in February. The number of layoffs and discharges decreased in state and local government education (-13,000). The number of layoffs and discharges decreased in the Northeast region.
Putting all this in in context
- Job openings have increased since a low in July 2009. They returned to the prerecession level in March 2014 and surpassed the prerecession peak in August 2014. There were 6.1 million open jobs on the last business day of February 2018.
- Hires have increased since a low in June 2009 and have surpassed prerecession levels. In February 2018, there were 5.5 million hires.
- Quits have increased since a low in September 2009 and have surpassed prerecession levels. In February 2018, there were 3.2 million quits.
- For most of JOLTS history, the number of hires (measured throughout the month) has exceeded the number of job openings (measured only on the last business day of the month). Since January 2015, however, this relationship has reversed with job openings outnumbering hires in most months.
- At the end of the most recent recession in June 2009, there were 1.2 million more hires throughout the month than there were job openings on the last business day of the month. In February 2018, there were 545,000 fewer hires than job openings.
Finally, the infamously broken Beveridge Curve (job openings rate vs unemployment rate), continues to gradually normalize after a nearly decade-long “drift” from its conventional pattern. From the start of the most recent recession in December 2007 through the end of 2009, the series trended lower and further to the right as the job openings rate declined and the unemployment rate rose. In February 2018, the unemployment rate was 4.1 percent and the job openings rate was 3.9 percent.
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