Job Openings and Labor Turnover: February 2004

Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.

New monthly data on job openings and labor turnover were announced today by the Bureau of Labor Statistics of the U.S. Department of Labor. For the first time, these data are seasonally adjusted, allowing analysis of over-the-month change. There were 2.9 million job openings, 4.1 mil- lion hires, and 4.0 million separations in February 2004, about the same as in January. These series include estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector with breakouts by industry and geographic region.

Job Openings

On the last business day of February 2004, there were 2.9 million job openings in the United States, and the job openings rate (the number of job openings on the last business day of the month divided by employment plus job openings) was 2.2 percent. Over the month, the job openings rate showed little or no change overall and for the major industries. (See table 1.) The job openings rate has been relatively unchanged since October 2001, ranging from 2.0 percent to 2.4 percent.

Hires and Separations

The hires rate (the number of hires during the month divided by employ- ment) was little changed in February at 3.1 percent. (See table 2.) Hires are any additions to the payroll during the month. The hires rate has ranged from 3.0 percent to 3.2 percent since August 2002. The hires rate decreased in professional and business services in February, while all other major in- dustries showed little or no change over the month.

The total separations, or turnover, rate (the number of separations during the month divided by employment) was 3.1 percent in February 2004 and has been essentially unchanged since early 2002. (See table 3.) Separations are terminations of employment that occur at any time during the month. The major industries showed little or no change in their total separations rates over the month.

Total separations includes 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 essentially unchanged in February at 1.7 per- cent and has shown little movement since 2001. (See table 4.) Profes- sional and business services showed an increase in the quits rate over the month, while other major industries showed little or no change. The other two components of total separations, layoffs and discharges (1.0 per- cent) and other separations (0.2 percent), are not seasonally adjusted. (See tables 9 and 10.)

Hires and separations help show dynamic flows in the labor market. Over the last 12 months, hires have averaged 4.1 million per month and separations have averaged 3.9 million per month. (See the note on page 4 and the Tech- nical Note for additional information on these measures.) The trade, trans- portation, and utilities; professional and business services; and leisure and hospitality industries typically report the largest share of hires and sepa- rations.

For additional information, please see the Technical Note or the JOLTS Web site at www.bls.gov/jlt/. Additional information about JOLTS also may be obtained by e-mailing Joltsinfo@bls.gov or by calling (202) 691-5870.

Job Openings and Labor Turnover Survey

The Bureau of Labor Statistics initiated the publication of the Job Openings and Labor Turnover Survey (JOLTS) data with a news release in July 2002 that presented data from December 2000 through May 2002. Since that time, data have been updated monthly on the BLS Web site. With the release of January 2004 estimates, the Bureau introduced new seasonally adjusted JOLTS data series and initiated several changes in the publication of JOLTS estimates. Each month, the Bureau will issue a news release with seasonally adjusted estimates and an analysis of significant over-the-month changes. The monthly JOLTS news release will contain both the current month's preliminary estimates and the previous month’s final estimates.

Background

JOLTS collects monthly job openings and labor turnover data from a random sample of 16,000 nonfarm business establishments, including fac- tories, offices, and stores, as well as federal, state, and local gov- ernments in the 50 states and the District of Columbia.

The data collected monthly from each cooperating establishment are employment for the pay period that includes the 12th of the month; job openings on the last business day of the month; and hires, quits, layoffs and discharges, and other separations for the entire month. The measure of job openings is a one-day snapshot at the end of the month, while the hires and separations measures represent flows of workers into and out of jobs over the course of the full calendar month.

In responding to the survey, employers are asked to report only those job openings for which: 1) a specific position exists, 2) work could start within 30 days, and 3) the employer is actively recruiting from outside of the establishment to fill the position. Hires are any additions to the pay- roll, and separations are any separations from the payroll, including quits, layoffs and discharges, and other separations (retirements or transfers to other locations). For hires and separations, firms are asked to exclude em- ployees returning from or going on strike; employees of temporary help agen- cies, leasing companies, outside contractors, or consultants; and employees changing jobs within the establishment. Data on employees of temporary help agencies, leasing companies, outside contractors, and consultants are report- ed by employers in those industries.

Not seasonally adjusted data on job openings, hires, total separations, quits, layoffs and discharges, and other separations levels and rates are available for the total nonfarm sector; for the total private sector and 16 private industry divisions based on the North American Industry Classifica- tion System (NAICS); and government, with breakouts for the federal govern- ment and for state and local government combined. Levels and rates also are published for four geographic regions: the Northeast, South, Midwest, and West. Seasonally adjusted job openings, hires, total separations, and quits levels and rates are available for the nation, selected industry sectors, and the four geographic regions. (See the Technical Note for additional informa- tion on seasonal adjustment methodology.)

Uses of the Data

As the monthly JOLTS time series grow longer, their value will increase in assessing, over the course of the business cycle, the ease or difficulty that employers have in hiring workers and the extent of any mismatch be- tween the unused supply of available workers and the unmet demand for labor by employers. Of particular interest will be the study of the complex re- lationship between job openings and unemployment. While these two measures are expected to move in opposite directions over the course of the business cycle, their relative levels and movements will depend on the efficiency of the labor market in matching workers and jobs.

Together with the job openings rate, trends in hires and separations estimates may broadly identify which aggregate industries face the tight- est labor markets. Quits rates may provide clues about workers’ views of the labor market or their success in finding better jobs. In addition, businesses will be able to compare their own turnover rate with the nation- al, regional, and major industry division rates.

Hires and separations cannot completely explain net changes in payroll employment. Research shows that some reporters systematically underreport separations relative to hires due to a number of factors, including the nature of their payroll systems and practices. The shortfall appears to be about 2 percent or less over a 12-month period. Other reasons why it is problematic to compare changes in payroll employment with JOLTS hires and separations, especially over short-term periods, are: 1) the reference period for payroll employment is the pay period including the 12th of the month, while the reference period for hires and separations is the calendar month; and 2) payroll employment can vary from month to month simply because part-time and on-call workers may not always work during the pay period in- cluding the 12th of the month.