Job Openings Drop By 250K In Last Two Months, Stand At 3.1 Million In December

According to the latest JOLTS survey released by the BLS, the number of total job openings in December declined to 3,063,000 a drop from November's 3.2 million and even more so from October's 3.328 million. Expressed as a Job openings rate, this was a third consecutive decline, dropping from 2.5% in October to 2.3% currently. And while job openings were dropping, separation levels increased from 4.084 million in October to 4.154 in November and 4.162 million in December. The bulk of separations occurred in the construction industry where we saw a print of 473k, or over 100K more than November's 363K. Recall that construction jobs are what the recent NFP weakness has been primarily blamed on. Digging into the Separations numbers (which includes quits, or voluntary and discharges, or involuntary separations), the Quits level, which was at 1,991K in December was the highest Quit print since August 2010, when the number hit 1,998K.

Summarizing this visually:

Much more detail:

Number of unemployed persons per job opening:

  • The ratio between the unemployment level and job openings level changes over time.
  • When the recent recession began, the unemployed persons per job opening was 1.8. When the recession ended (June 2009), there were 5.9 unemployed persons per job opening.
  • The unemployed persons per job opening ratio has trended downward since the end of the recession and was 4.7 in December 2010.

Job openings and employment:

  • The number of job openings declined to a series low in July 2009, 1 month after the official end of the recent recession. Employment continued to decline after the end of the recession, reaching a low point in February 2010.
  • There were 3.1 million job openings in December 2010, which is 31 percent higher than the recent series low in July 2009. The level is still well below the 4.8 million openings at the peak in March 2007.

Hires, total separations and employment:

  • Hires, total separations, and employment all remained below pre-recession levels in December.
  • The number of hires decreased by 23 percent during the recession (December 2007 to June 2009). Since June 2009, the number of hires has increased by only 9 percent. Hires totaled 4.2 million in December.
  • Unlike hires, separations continued to decline following the recession. Separations fell by 20 percent between December 2007 and February 2010. In December, there were 4.2 million total separations, only 193,000 more than the low point in February.

Quit and layoffs and discharges

  • Quits tend to rise when there is a perception that another job is available and tend to fall when there is a perception that jobs are scarce.
  • For most of the JOLTS series, the number of quits has exceeded the number of layoffs and discharges.
  • During the latest recession, this relationship changed as layoffs and discharges outnumbered quits from November 2008 through
  • January 2010. The rise in layoffs and discharges in May and June 2010 is due to layoffs of temporary Census 2010 workers as they completed their work.
  • In December, there were 2.0 million quits, still well below the 2.9 million quits in December 2007, the first month of the recession.
  • Unlike quits, layoffs and discharges have returned to pre-recession levels. The 1,838,000 layoffs and discharges in December were slightly more than the 1,835,000 layoffs and discharges in December 2007 when the recession began.