Two months after the number of US job openings reported by the JOLTS dropped to a six month low amid a slowdown in hiring and quitting, all it took was one comprehensive data revision to set the seasonally-adjusted, statistically inferred US labor market back on track, and according to the latest JOLTS report, in January, the number of job openings soared from a downward revised 5.667 million to 6.312 million, a 645,000 increase, the second biggest monthly jump on record.
The job openings level increased for total private (+608,000) and edged up for government. The job openings rate increased to 4.1 percent in January. The number of job openings increased in professional and business services (+215,000), transportation, warehousing, and utilities (+113,000) construction (+101,000), and several other industries. The number of job openings increased in the South, Midwest, and West regions.
It wasn't just job openings that jumped: total hires rose as well, increasing from a revised 5.524 million in December to 5.583 million in January, the second highest on record after October's 5.609 million. While the number of hires was little changed for total private, it rose for federal government (+10,000).
The other closely watched category, the level of quits - which indicates workers' confidence they can leverage their existing skills and find a better paying job - reversed last month's increase, and in January declined modestly from 3.340MM to 3.271MM, suggesting workers were feeling just a little less confident about demand for their job skills than the previous month. Quits increased in arts, entertainment, and recreation (+13,000) but decreased in professional and business services (-71,000). The number of quits decreased in the West region.
And with a total 5.4 million separations (a 3.7% rate), this means that there were 1.8 million layoffs and discharges in November, virtually unchanged from December. The layoffs and discharges rate was 1.2 percent in January, same as December. The number of layoffs and discharges was little changed for total private and for government. The layoffs and discharges level increased in health care and social assistance (+52,000). Layoffs and discharges were little changed in all four regions.
Putting all this in in context
- Job openings have increased since a low in July 2009. They returned to the prerecession level in March 2014 and surpassed the prerecession peak in August 2014. There were 6.3 million open jobs on the last business day of January 2018, a new series high.
- Hires have increased since a low in June 2009 and have surpassed prerecession levels. In January 2018, there were 5.6 million hires.
- Quits have increased since a low in September 2009 and have surpassed prerecession levels. In January 2018, there were 3.3 million quits.
- For most of JOLTS history, the number of hires (measured throughout the month) has exceeded the number of job openings (measured only on the last business day of the month). Since January 2015, however, this relationship has reversed with job openings outnumbering hires in most months.
- At the end of the most recent recession in June 2009, there were 1.2 million more hires throughout the month than there were job openings on the last business day of the month. In January 2018, there were 729,000 fewer hires than job openings.
Finally, and perhaps most notably, the Beveridge Curve (job openings rate vs unemployment rate), continues to gradually normalize after a nearly decade-long "drift" from its conventional pattern. From the start of the most recent recession in December 2007 through the end of 2009, the series trended lower and further to the right as the job openings rate declined and the unemployment rate rose. In January 2018, the unemployment rate was 4.1 percent and the job openings rate was 4.1 percent.