Tuesday, July 13, 2010

BLS: Low Labor Turnover in May

by Bill McBride on 7/13/2010 10:41:00 AM

From the BLS: Job Openings and Labor Turnover Summary

There were 3.2 million job openings on the last business day of May 2010, the U.S. Bureau of Labor Statistics reported today. The job openings rate was little changed over the month at 2.4 percent. The
hires rate (3.4 percent) was little changed and the separations rate (3.1 percent) was unchanged.
...
[T]he number of job openings has risen by 868,000 (37 percent) since the most recent trough of 2.3 million in July 2009. Even with the gains since July 2009, the number of job openings in May 2010 remained below those in place at the start of the recession in every industry except government, and in each region except the Northeast.
Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. The CES (Current Employment Statistics, payroll survey) is for positions, the CPS (Current Population Survey, commonly called the household survey) is for people.

The following graph shows job openings (purple), hires (blue), Total separations (include layoffs, discharges and quits) (red) and Layoff, Discharges and other (yellow) from the JOLTS.

Unfortunately this is a new series and only started in December 2000.

Job Openings and Labor Turnover Survey Click on graph for larger image in new window.

Notice that hires (blue) and separations (red) are pretty close each month. In May, about 4.1 million people lost (or left) their jobs, and 4.5 million were hired (this is the labor turnover in the economy).

When the hires (blue line) is above total separations (as in May), the economy is adding net jobs, when the blue line is below total separations, the economy is losing net jobs.

The hires in May included the 411 thousand temporary Census 2010 hires. Without those hires, the JOLTS report shows only 8 thousand hires in May.

Layoffs and discharges have declined sharply since early 2009 - and are near a series low - and that is a good sign. And the number of job openings has moved up recently (although down slightly in May). But the overall turnover, especially after removing the impact of the Census hiring, is still low.

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