Job Openings and Labor Turnover: December 2006

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.

The job openings, hires, and total separations rates were essentially unchanged in December, the Bureau of Labor Statistics of the U.S. Depart- ment of Labor reported today. Despite little month-to-month change in the hires and separations rates, there continues to be considerable churn- ing in the labor market with large numbers of hires and separations every month. This release includes estimates of the number and rate of job open- ings, hires, and separations for the total nonfarm sector by industry and geographic region.

Job Openings

On the last business day of December 2006, there were 4.4 million job openings in the United States, and the job openings rate was 3.2 percent. The job openings rate was little changed during the first half of 2006, but trended upward in the latter part of the year. The December rate is the highest since February 2001. In December, the job openings rate rose in manufacturing and in trade, transportation, and utilities; the rate did not fall significantly in any industry. Geographically, the job openings rate increased in the Northeast and South over the month. None of the regions experienced a significant decline in its rate. The seasonally adjusted job openings rate was highest in December for the following industries: profes- sional and business services (4.4 percent), leisure and hospitality (4.1 per- cent), and education and health services (3.9 percent). (See table 1.)

Over the year, the job openings rate increased in nearly half the industries and decreased only in construction and in finance and insurance. The job open- ings rate also rose over the year in the Northeast and West regions. (See table 5.)

Hires

The hires rate was essentially unchanged at 3.6 percent in December. Hires are any additions to the payroll during the month. In December, the hires rate did not change significantly in any industry but did decline in the South and West regions. The seasonally adjusted hires rate was highest in December in the leisure and hospitality industry (7.2 percent). (See table 2.)

From December 2005 to December 2006, the hires rate rose in federal govern- ment but fell in transportation, warehousing, and utilities. The hires rate did not change significantly in any region over the year. (See table 6.)

Separations

The total separations, or turnover, rate was little changed at 3.3 percent in December. Separations are terminations of employment that occur at any time during the month. In December, the total separations rate declined in profes- sional and business services and in government. Geographically, the separations rate fell in the South over the month. From December 2005 to December 2006, the total separations rate fell in transportation, warehousing, and utilities and in arts, entertainment, and recreation; the rate did not rise significantly in any industry. Geographically, only the rate for the Midwest region increased. The other regions did not experience a significant change in the total separations rate over the year. (See tables 3 and 7.)

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 little changed at 2.0 percent in December. Over the month, the only industry or region to experience a change in the quits rate was the professional and business services in- dustry, in which the rate declined. In December, the seasonally adjusted quits rate was highest in the leisure and hospitality industry (4.4 percent), which also had the highest hires rate. (See table 4.)

Over the year, the quits rate rose in nondurable goods manufacturing but fell in construction; transportation, warehousing and utilities; and arts, entertainment, and recreation. (See table 8.)

The other two components of total separations--layoffs and discharges, and other separations--are not seasonally adjusted. For December, the layoffs and discharges rate (1.3 percent) and level (1.8 million) were little changed from the prior year. The construction industry had the highest layoffs and discharges rate (3.8 percent). From December 2005 to December 2006, the other separations rate decreased slightly to 0.2 percent and the level declined significantly to 286,000. (See tables 9 and 10.)

Flows in the Labor Market

Hires and separations data help show dynamic flows in the labor market. For the year 2006, hires have averaged 4.9 million per month and separations have averaged 4.5 million per month (not seasonally adjusted). The average monthly hires have in- creased each year since 2003 when there were 4.1 million hires per month. The aver- age monthly separations increased in 2004 and in 2005 but fell slightly in 2006. (See the Technical Note for additional information on these measures.)

Several industries have high rates of both hires and separations. These include construction; retail trade; professional and business services; arts, entertainment, and recreation; and accommodations and food services. In the last 12 months, these five industries produced 34.8 million hires and 32.2 million separations. Thus, these five industries accounted for 59 percent of total nonfarm hires and 59 percent of total nonfarm separations, while comprising only 39 percent of total nonfarm em- ployment.

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

The Job Openings and Labor Turnover release for January 2007 is scheduled to be issued on Tuesday, March 13, 2007.