Although the month-to-month changes in job openings, hires, and turnover data are often small, the trends over time are notable. The job openings rate remained essentially flat from August 2006 through September 2007, followed by a downward trend through August 2008. The hires rate has trended downward since August 2006. At 3.0 percent or lower in three of the last four months, the hires rate has been essentially at the lowest level since May 2003. The separations rate, after trending down from December 2007 through May of this year, has held steady at 3.2 percent for the past three months. With the hires rate trending downward and the separations rate leveling off recently, the hires rate has been lower than the separations rate several times in recent months.
Job Openings
Continuing the downward trend that began in September 2007, the job openings rate declined to 2.3 percent in August, the lowest level since April 2004. The decrease in the job openings rate in recent months is due to declines in construction, wholesale trade, professional and business services, and accommodation and food services. Throughout the series, three industries consistently have had higher job openings rates than the other industries, although the gap has recently decreased: education and health services (3.3percent in August), professional and business services (2.9 percent),and accommodation and food services (2.5 percent).
Over the last 12 months, the job openings rate (not seasonally adjusted) rose significantly only in natural resources and mining (to 2.1 percent) and in the federal government (2.4 percent). The rate fell over the year for total nonfarm and total private as well as in most industries, including construction; durable goods manufacturing; wholesale trade; transportation, warehousing, and utilities; information; finance and insurance; real estate and rental and leasing; professional and business services; health care and social assistance; accommodation and food services; and state and local government. The job openings rate also fell over the year in all four regions.
Hires
The hires rate was little changed in August at 3.0 percent. The only industry or region with a significant over-the-month change in August was construction, in which the hires rate rose. As occurs nearly every month, the seasonally adjusted hires rate was highest in accommodation and food services (5.3 percent) and lowest in state and local government (1.5 percent).
Over the past 12 months, the hires rate increased significantly in only transportation, warehousing, and utilities and in educational services. The rate decreased significantly over the year for total nonfarm, total private, and many industries, including durable goods manufacturing; nondurable goods manufacturing; retail trade; information; finance and insurance; accommodation and food services; federal government; and state and local government. Regionally, the hires rate dropped significantly over the year in the Northeast and the South.
Separations
The total separations, or turnover, rate was unchanged at 3.2 percent in August. Only two industries had a significant change in the separations rate in August—in professional and business services the rate rose and in education and health services the rate fell. Over the past 12 months, the separations rate rose significantly only in the other services industry and fell in nondurable goods manufacturing; finance and insurance; health care and social assistance; federal government; and state and local government. After rising in 2006 and 2007, the separations rate dropped sharply in 2008 in the federal government, with decreases in every type of separation—quits, layoffs and discharges, and other separations. As often occurs, the seasonally adjusted separations rate was highest in construction (5.7 percent) and lowest in state and local government (1.2 percent).
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 unchanged in August for total nonfarm (1.7 percent) and has been stable since November 2007. The quits rate edged down in August only in education and health services; the rate did not rise significantly over the month in any industry or region. As has occurred every month since the series began in December 2000, the seasonally adjusted quits rate was highest in the accommodation and food services industry (3.7 percent) and lowest in state and local government (0.6 percent). From August 2007 to August 2008, the quits rate fell for total nonfarm and total private and in many industries, including durable goods manufacturing; nondurable goods manufacturing; wholesale trade; finance and insurance; real estate and rental and leasing; health care and social assistance; arts, entertainment, and recreation; accommodation and food services; federal government; and state and local government. The quits rate also fell over the year in three of the four regions— Northeast, South, and West. The quits rate rose significantly over the year only in the other services industry.
The other two components of total separations—layoffs and discharges, and other separations—are not seasonally adjusted. In August, the layoffs and discharges rate (1.6 percent) and level (2.1 million) were higher than a year earlier with significant increases in durable goods manufacturing; professional and business services; and arts, entertainment, and recreation. The rate fell over the year for the federal government. The layoffs and discharges rate was highest in arts, entertainment, and recreation (6.0 percent) and lowest in federal government (0.3 percent). The other separations rate (0.2 percent) and level (340,000) were essentially unchanged from a year earlier at the total nonfarm level. Although the other separations rate was unchanged at the total nonfarm level over the year, the rate was up in professional and business services and down in information; arts, entertainment, and recreation; federal government; and state and local government.
The total separations rate is driven by the relative contribution of its three components (quits, layoffs and discharges, and other separations), with quits contributing the largest portion. The percentage of total separations attributable to quits has varied over time. The proportion of total separations due to quits (seasonally adjusted) rose from a post-recession low of 50 percent in December 2003 to a high of 61 percent in December 2006 before trending downward again. Quits accounted for only 52 percent of total separations in August 2008, down considerably in the past two months as quits decreased and layoffs increased.
Flows in the Labor Market
Several industries consistently have high rates of both hires and separations. These include construction; retail trade; professional and business services; arts, entertainment, and recreation; and accommodation and food services. In the 12 months ending in August 2008, these 5 industries produced 31.4 million hires and 31.6 million separations, accounting for 58 percent of total nonfarm hires and 59 percent of total nonfarm separations while comprising only 39 percent of total nonfarm employment.
