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Job Openings Hit Five-Year High in June

The number of job openings rose 29,000 in June to the highest level in five years, the Bureau of Labor Statistics (BLS) reported Tuesday in its monthly ""Job Openings and Labor Turnover Survey"":http://www.bls.gov/news.release/archives/jolts_08062013.pdf (JOLTS). At the same time, the number of unemployed individuals per job opening dipped below 3 (to 2.99) for the first time since October 2008.


According to the JOLTS report, there were 3.936 million job openings at the end of June compared with 11.777 million unemployed in the middle of the month. The ratio of unemployed to job openings was 3.01 in May. It peaked at 6.73 in July 2009, the month in which the recession officially ended (as determined by the National Bureau of Economic Research Business Cycle Dating Committee).

The JOLTS data showed 4.201 million persons were hired in June, down from 4.49 million in May. Year-to-date, hiring is down slightly from the first six months of 2012: 26,062,000 this year compared with 26,251,000 for the first six months of last year. Nonetheless, hiring is on pace to exceed full-year 2012 hiring, which dropped off in the second half of the year: 52,124,000 compared with actual 2012 hiring of 51,956,000. The last time full-year hiring topped 50 million for two straight years was 2007 and 2008.

The number of people leaving their jobs voluntarily in the first six months of the year--13,223,000--is 4.9 percent higher than the first six months of 2012, a sign of increasing confidence in the ability to find a new job--although the number of ""quits"" in June was 2,160,000, down 3.3 percent from 2,233,000 in May. The number of total separations in June, 4,081,000, was 6.8 percent below May's 4,381,000 as the number of layoffs and discharges dropped.

In June 1,537,000, workers were laid off or discharged compared with 1,752,000 in May as reflected in the general decline in first-time claims for unemployment insurance. Year-to-date, layoffs and discharges are down 7.5 percent from the first six months of 2012.

Employment and jobs data have taken on an added significance in the wake of the announcement by the Federal Reserve that it would consider pulling back on its monetary policy stimulus once the unemployment rate dropped below 6.5 percent from its current 7.4 percent.

The number of unemployed per job opening fell sharply in the construction industry to 6.2 in June--the lowest level since July 2008--from a revised 8.7 in May. While the number of construction job openings rose, the number of unemployed construction workers dropped in June to 825,000, the lowest level since August 2008, when 814,000 construction workers were unemployed. The improving trend is consistent with optimism seen in the National Association of Home Builders’ monthly Housing Market Index.

Unemployed per job opening edged up to 4.6 in June from 4.5 in May in the manufacturing sector, which added jobs in July for the first time in five months. Unemployed per job opening edged up as well in the transportation, education and health services, leisure and hospitality, and ""other services"" industrial sectors. The ratio fell in the information, financial, and business services sectors as well as construction.

The JOLTS report tracks flows within the labor sector, noting hirings and separations by month as well as the number of job openings at the end of a month. It is reported by BLS on a one-month lag. In addition to totals, data are reported on major industry sectors.

The calculation of unemployed per job opening is a function of the number of people unemployed, which rose slightly to 11,777,000 in June from 11,760,000 in May. ""Unemployed"" is a defined term when used by BLS to apply only to individuals who are available for work, out of work, and looking for work. An individual who does not meet all three tests is not counted as unemployed.

_Hear Mark Lieberman on P.O.T.U.S (Sirius 124) on Friday at 6:20 a.m. Eastern._

About Author: Mark Lieberman

Mark Lieberman is the former Senior Economist at Fox Business Network. He is now Managing Director and Senior Economist at Economics Analytics Research. He can be heard each Friday on The Morning Briefing on POTUS on Sirius-XM Radio 124.

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