Job Openings and Labor Turnover: February 2007

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.

On the last business day of February, there were 4.1 million job open- ings in the United States, and the job openings rate was 2.9 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The job openings, hires, and total separations rates were essentially un- changed in February. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector by industry and geographic region.

Job Openings

At 2.9 percent in February, the job openings rate has been essentially flat since September 2006. In February, the job openings rate rose in the construction industry and fell in the Northeast region; no other industry or region experienced a significant over-the-month change in the job open- ings rate. The seasonally adjusted job openings rate was highest in Feb- ruary for the following industries: accommodations and food services (4.0 percent), education and health services (3.6 percent), and professional and business services (3.5 percent). (See table 1.)

Over the year, the job openings rate increased in nondurable goods manu- facturing; transportation, warehousing, and utilities; information; and other services. The rate decreased in durable goods manufacturing; finance and insurance; professional and business services; accommodations and food services; and federal government. The job openings rate did not change sig- nificantly over the year in any of the regions. (See table 5.)

Hires

The hires rate was essentially unchanged at 3.5 percent in February. Hires are any additions to the payroll during the month. In February, the hires rate fell in the retail trade industry and in the Northeast region; no other industry or region experienced a significant over-the-month change in the hires rate. The seasonally adjusted hires rate was highest in Feb- ruary in the leisure and hospitality industry (7.1 percent). (See table 2.)

From February 2006 to February 2007, the hires rate rose in educational services and federal government, but fell in construction; retail trade; information; accommodations and food services; and other services. Region- ally, the hires rate increased over the year in the Midwest but decreased in the South. (See table 6.)

Separations

The total separations, or turnover, rate was little changed at 3.3 per- cent in February. Separations are terminations of employment that occur at any time during the month. In February, the only industry to experience a change in the separations rate was state and local government, where the rate declined slightly. None of the regions experienced a significant change in the separations rate. From February 2006 to February 2007, the total separations rate rose significantly only in federal government; the rate did not decline significantly in any industry. Geographically, none of the regions experienced 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 February. Over the month, the quits rate rose in accommodations and food services but fell in state and local government. None of the regions experienced a significant change in the quits rate over the month. In February, the seasonally adjusted quits rate was highest in the accommodations and food services industry (4.6 percent). (See table 4.)

Over the year, the quits rate rose in finance and insurance and profes- sional and business services but fell in construction. Geographically, the quits rate declined over the year in the Northeast region. (See table 8.)

The other two components of total separations--layoffs and discharges, and other separations--are not seasonally adjusted. For February, the layoffs and discharges rate (0.9 percent) and level (1.2 million) were little changed from the prior year. The construction industry had the highest layoffs and discharges rate (2.4 percent) in February. From February 2006 to February 2007, the other separations rate was unchang- ed at 0.2 percent and the level was little changed at 257,000. (See tables 9 and 10.)

Quits as a Percentage of Separations

The total separations rate is driven by the relative contribution of its three components (quits, layoffs and discharges, and other separa- tions), with quits contributing the largest portion. The percentage of total separations attributable to quits has risen and fallen over time along with employment levels. Total nonfarm employment had peaked in February 2001 at 132.6 million, and then had fallen to a low of 129.8 million in August 2003. During the same time period, the proportion of quits fell from 61 percent in February 2001 to 51 percent in August 2003 (seasonally adjusted). The proportion of quits has since risen to 60 percent in February 2007. Between early 2001 and mid-2003, total sepa- rations fell by 613,000 but quits fell by a greater amount, 759,000, causing the proportion of total separations attributable to quits to fall.

This change in quits as a percentage of total separations is espe- cially pronounced in manufacturing, retail trade, and professional and business services. Geographically, the regions averaged 61 percent of totat separations attributable to quits at the employment peak in Feb- ruary 2001. All four regions experienced a decline in the proportion of quits during the period of employment decline. The Northeast re- gion's proportion declined the most, falling to a low of 39 percent. Since the employment trough in August 2003, the South and West have fully recovered to early 2001 levels of quits as a proportion of sepa- rations, but the Northeast and Midwest have not.

Flows in the Labor Market

Hires and separations data help show dynamic flows in the labor market. For the 12 months ending in February 2007, hires have averaged 4.9 million per month and separations have averaged 4.6 million per month (not season- ally adjusted). The comparable figures for the prior 12-month period were 4.8 million hires and 4.5 million separations. (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 12 months ending in February 2007, these five industries produced 34.9 million hires and 32.9 million separations. Thus, these five indus- tries accounted for 59 percent of total nonfarm hires and 59 percent of total nonfarm separations while comprising only 39 percent of total non- farm employment.

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 obtained by e-mailing Joltsinfo@bls.gov or by calling (202) 691-5870.

The Job Openings and Labor Turnover release for March 2007 is sched- uled to be issued on Tuesday, May 8.