December U.S. JOLTS: Job Market Remains Tight
by:Sandy Batten
|in:Economy in Brief
Summary
- Job openings up slightly; third highest level on record.
- Biggest monthly decline in hiring since December 2020.
- Quits recede after November record surge.
- Layoffs and discharges fall to record low.
The Bureau of Labor Statistics reported that on the last business day of December, the total number of job openings rose 1.4% m/m from November to 10.925 million, a little above expectations. This was the third highest total openings on record, exceeded only by July and October 2021, and clearly well above pre-pandemic norms. The job openings rate, calculated as job openings as a percent of the sum of total employment and openings, was unchanged at 6.8%, the second highest on record. New hires fell 5.0% m/m in December to 6.263 million, the lowest level since May 2021, with the hiring rate slipping to 4.2% from 4.4% in November. The number quitting their job fell 3.6% m/m to 4.338 million in December from the record 4.499 million recorded in November. The quit rate, quits as a percent of total employment, edged down to 2.9% in December from a record 3.0% in November. Layoffs and discharges fell 10.7% m/m in December to 1.169 million, the lowest level on record. The JOLTS figures date back to December 2000.
Private-sector job openings rate rose 1.3% m/m in December to fell to 9.882 million with the private-sector job openings rate edging up to 7.2% from 7.1%. Job openings increased in several industries with the largest increases in accommodation and food services (+133,000 or 9.5%), information (+40,000 or 22.6%), and nondurable goods manufacturing (+31,000 or 9.0%). Job openings decreased in finance and insurance (-89,000 or -21.9%) and in wholesale trade (-48,000 or -14.9%) and were little changed in manufacturing. Private-sector hiring fell 5.4% m/m in December, its largest monthly decline since December 2020, to 5.87 million. Hiring fell in each major sector in December.
Total separations include quits, layoffs and discharges, and other separations. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers' willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations includes separations due to retirement, death, disability, and transfers to other locations of the same firm. Private-sector quits declined 3.6% m/m in December to 4.129 million. This was the second decline in the past three months. Still, quits remain quite elevated relative to before the pandemic, indicating ongoing labor-market tightness.
This tightness was further supported by an 11.9% m/m decline in private-sector layoffs and discharges to 1.097 million, the lowest on record. Sectoral declines were in construction; trade, transportation and utilities; professional and business services; and leisure and hospitality. Increases were recorded in manufacturing, information, financial activities and education and health services. In total, all private-sector separations fell 5.3% m/m to 5.548 million in December.
The Job Openings and Labor Turnover Survey (JOLTS) are available in Haver's USECON database.
Sandy Batten
AuthorMore in Author Profile »Sandy Batten has more than 30 years of experience analyzing industrial economies and financial markets and a wide range of experience across the financial services sector, government, and academia. Before joining Haver Analytics, Sandy was a Vice President and Senior Economist at Citibank; Senior Credit Market Analyst at CDC Investment Management, Managing Director at Bear Stearns, and Executive Director at JPMorgan. In 2008, Sandy was named the most accurate US forecaster by the National Association for Business Economics. He is a member of the New York Forecasters Club, NABE, and the American Economic Association. Prior to his time in the financial services sector, Sandy was a Research Officer at the Federal Reserve Bank of St. Louis, Senior Staff Economist on the President’s Council of Economic Advisors, Deputy Assistant Secretary for Economic Policy at the US Treasury, and Economist at the International Monetary Fund. Sandy has taught economics at St. Louis University, Denison University, and Muskingun College. He has published numerous peer-reviewed articles in a wide range of academic publications. He has a B.A. in economics from the University of Richmond and a M.A. and Ph.D. in economics from The Ohio State University.
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