Job Openings and Labor Turnover: January 2011

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.

There were 2.8 million job openings on the last business day of January 2011, the U.S. Bureau of Labor Statistics reported today. The job openings rate (2.1 percent), hires rate (2.8 percent), and total separations rate (2.7 percent) were little changed over the month. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector by industry and by geographic region. This release also includes annual estimates for hires and separations. The annual totals for hires and quits increased in 2010 while the annual total for layoffs and discharges decreased.

Job Openings The number of job openings in January was 2.8 million, little changed from 2.9 million in December. (See table 1.) The job openings level has risen since the end of the recession in June 2009 (as designated by the National Bureau of Economic Research) but remains well below the 4.4 million openings when the recession began in December 2007.

The number of job openings in January 2011 (not seasonally adjusted) increased from 12 months earlier for total nonfarm, total private, several industries, and the South region. The level fell over the year for federal government. (See table 5.)

Hires In January, the hires rate was essentially unchanged at 2.8 percent. The number of hires decreased in construction but was little changed in every other industry and region. (See table 2.) At 3.7 million, the number of monthly hires in January was well below the 5.0 million monthly hires in December 2007 when the recession began.

Over the 12 months ending in January, the hires rate (not seasonally adjusted) was little changed for total nonfarm, total private, and government. The hires rate fell over the year in construction and federal government but rose in wholesale trade. The rate also fell in the Northeast region. (See table 6.)

Separations Total separations includes quits (voluntary separations), layoffs and discharges (involuntary separations), and other separations (including retirements). The total separations, or turnover, rate was little changed at 2.7 percent in January. Over the 12 months ending in January, the total separations rate (not seasonally adjusted) was essentially unchanged for total nonfarm, total private, and government. (See tables 3 and 7.)

The quits rate can serve as a measure of workers’ willingness or ability to change jobs. In January, the quits rate declined for total private (to 1.4 percent) but was little changed for total nonfarm (1.3 percent) and government (0.5 percent). (See table 4.) The number of monthly quits in January (1.7 million) remains well below the 2.8 million monthly quits in December 2007 when the recession began.

Although still low, the number of quits (not seasonally adjusted) in January 2011 was higher than in January 2010 for total nonfarm and total private. Professional and business services and federal government were the only industries with a rise in quits over the 12 months. (See table 8.)

The layoffs and discharges component of total separations is seasonally adjusted at the total nonfarm, total private, and government levels. The layoffs and discharges rate was essentially unchanged in January for total nonfarm and total private but fell for government. After peaking at 2.5 million in February 2009, the number of layoffs and discharges for total nonfarm fell to a series low of 1.5 million in January 2011. (See table B below.)

The layoffs and discharges level (not seasonally adjusted) declined over the 12 months ending in January for total nonfarm, total private, and government. Construction, durable goods manufacturing, and state and local government experienced a decline in the number of layoffs and discharges over the year. (See table 9.)

The other separations series is not seasonally adjusted. In January, there were 440,000 other separations for total nonfarm, 370,000 for total private, and 70,000 for government. Compared to January 2010, the number of other separations was little changed for total nonfarm and total private but higher for government. (See table 10.)

Relative Contributions to Separations The total separations level is influenced by the relative contribution of its three components—quits, layoffs and discharges, and other separations. The percentage of total separations at the total nonfarm level attributable to the individual components has varied over time, but for the majority of the months since the series began in December 2000, the proportion of quits has exceeded the proportion of layoffs and discharges. Other separations is historically a very small portion of total separations; it has rarely been above 10 percent of the total.

Since February 2010, the proportions of quits and of layoffs and discharges at the total nonfarm level have been close. In January 2011, the proportion of quits for total nonfarm was 47 percent and the proportion of layoffs and discharges was 43 percent. The proportions for total private were the same as for total nonfarm. For government, the proportions were 39 percent quits and 34 percent layoffs and discharges. (See table C below.)

Net Change in Employment Over the 12 months ending in January, hires (not seasonally adjusted) totaled 47.3 million and separations (not seasonally adjusted) totaled 46.3 million, yielding a net employment gain of 1.0 million at the total nonfarm level. These figures include workers who may have been hired and separated more than once during the year. Nearly half of the hires and nearly half of the separations during these 12 months occurred in three industries: retail trade; professional and business services; and accommodation and food services. The large share of total hires and separations accounted for by these three industries reflects the size of the industries as well as their relatively high hires and separations rates.

Annual Levels and Rates This release contains the 2010 annual levels and rates for hires, total separations, quits, layoffs and discharges, and other separations. Note that annual figures for job openings are not calculated because job openings are measured on a stock, or point-in- time, basis rather than on a flow basis over a specified time period. The annual figures and additional tables are published with the release of January data each year. (See the Technical Note for additional information on these measures.)

Calculating annual levels and rates allows additional comparisons across years. After 3 years of declines, annual levels for hires, quits, and other separations increased slightly in 2010. Layoffs and discharges annual levels were down in 2010 after three consecutive years of increases. Total separations annual levels declined for a fourth year in a row. These figures reflect the effects of the economic recovery since the end of the recession as well as the hiring and laying off of temporary workers for the Census 2010.

In 2010, annual hires increased to 47.2 million (36.4 percent of employment) and annual total separations fell to 46.3 million (35.7 percent of employment). Annual quits increased slightly to 21.3 million (16.4 percent of employment) in 2010 after falling to 20.6 million (15.7 percent of employment) in 2009. Annual other separations also increased slightly in 2010 to 3.8 million (2.9 percent of employment). Annual layoffs and discharges decreased in 2010 to 21.2 million (16.4 percent of employment) after reaching 26.3 million (20.1 percent of employment) in 2009. (See tables 11 through 20.)

Revisions to Job Openings and Labor Turnover Data

In accordance with annual practice, the Job Openings and Labor Turnover Survey (JOLTS) data have been revised to reflect annual updates to the Current Employment Statistics (CES), or establishment survey, employment estimates. The JOLTS employment levels (not published) are ratio-adjusted to the CES employment levels, and the resulting ratios are applied to all JOLTS data elements. This annual benchmark process resulted in revisions to all not seasonally adjusted JOLTS data series from April 2009 forward, the time period since the last benchmark was established. Additionally, the seasonally adjusted JOLTS data series have been recalculated from January 2006 forward to reflect updated seasonal adjustment factors. Further, the new methodology incorporated in 2009 to more closely align the hires and separations estimates with the monthly payroll employment change created a dependency of the not seasonally adjusted estimates on the seasonal adjustment process. Therefore, the not seasonally adjusted data series have been recalculated from January 2006 forward to reflect the updated seasonal adjustment factors’ effect on the alignment process.

The revised JOLTS estimates covering the period from January 2006 forward show substantial downward revisions in most data elements beginning in early 2008. These revisions are largely the result of updates made to the JOLTS birth/death model. The birth/death model was implemented in 2009 in order to provide an estimate for that part of the population that cannot be captured in the traditional sample. (See the technical note for a more complete description of the birth/death model.)

The birth/death model was initially developed using Quarterly Census of Employment and Wages (QCEW) data from the period 2000-2007. The birth/death model estimates used in JOLTS monthly estimation since 2008 were based on a forecast that used the period 2000-2007 as a baseline. With this release, JOLTS estimates for April 2008 forward include the most up to date QCEW values available, January 2008 through June 2010. In the future, the JOLTS birth/death model estimates will be updated each year as part of the annual retabulation process.

Incorporating the QCEW data for 2008 forward into the birth/death model enabled the model to more fully reflect the recent recession, resulting in a sizeable downward trend in the number of establishment births and the number of hires and separations from those new establishments. The previously published estimates based on the birth/death model using 2000-2007 QCEW data consequently overestimated hires, job openings, and separations.

Tables D through I present revised total nonfarm data for January through December 2010. The December 2010 revisions also reflect the routine incorporation of additional sample receipts into the final December estimates. Table D (job openings), table E (hires), table F (total separations), table G (quits), and table H (layoffs and discharges) present revised data on a seasonally adjusted basis, incorporating the new seasonal adjustment factors, benchmark level, and birth/death model update. Table I (other separations) present revisions on a not seasonally adjusted basis since that series is not adjusted.

The BLS website contains all revised historical seasonally adjusted and not seasonally adjusted JOLTS data. The data can be accessed through the JOLTS homepage at http://www.bls.gov/jlt/.

Further information on the revisions released today may be obtained by calling (202) 691-5870 or via the Internet on the JOLTS homepage.