March's Job Openings and Labor Turnover Survey (JOLTS) revealed a fewer-than-anticipated job openings, with vacancies falling to 7.192 million. This is the lowest number of openings in six months and below the expected 7.490 million. Additionally, hires and quits saw slight increases, while layoffs declined.
From the press release:
The number of job openings was little changed at 7.2 million in March, the U.S. Bureau of Labor Statistics reported today. Over the month, hires held at 5.4 million, and total separations changed little at 5.1 million. Within separations, quits (3.3 million) were unchanged and layoffs and discharges (1.6 million) edged down.
Background on JOLTS (Job Openings and Labor Turnover)
The JOLTS report is a monthly survey released by the BLS that tracks job openings, hiring, and separations (quits, layoffs, and discharges). Unlike the unemployment rate, which measures labor supply, JOLTS data helps gauge labor demand. An increase in job openings is generally a positive sign, indicating ample job opportunities.
The chart below displays the monthly data for the four components of the JOLTS series. Due to their volatility, six-month moving averages are included to highlight trends. The moving average for job openings remained above hires for over five years starting in 2015. It briefly dipped below hires in May and June 2020 but rebounded above in July 2020. From mid-2022 to September 2024, job openings, hires, and quits all declined, with job openings showing the steepest drop. However, since September 2024, hires and job openings have stabilized. Meanwhile, quits have continued their downward trend, while layoffs/discharges have gradually risen since mid-2022.
Jobs Report vs. JOLTS
JOLTS data lags the BLS employment report by one month. As a reminder, 228,000 jobs were added in March and the unemployment rate inched up to 4.2%.
For comparison, here is the monthly BLS Employment Situation Summary charted with JOLTS data:
JOLTS: Gauging Labor Demand
The job openings-to-workers ratio reflects labor demand by showing the balance between unfilled positions and available workers. A high ratio signals strong demand as employers struggle to hire, while a low ratio indicates weak demand due to a surplus of workers. In March, there were 7.083 million unemployed workers and 7.192 million job openings. This equates to 1.02 jobs available per unemployed worker, significantly below pre-pandemic levels and the lowest level since 2021.
A Population-Adjusted Perspective on JOLTS
The chart above is based on the actual numbers in the JOLTS report. A more insightful view is as a percentage of non-farm employment, providing a population-adjusted perspective. Below is the adjusted data for four JOLTS components. Each vertical axis is scaled to its high-low range to better highlight individual trends.
JOLTS: Job Openings
Job openings as a percent of nonfarm employment was at 4.5% in March, down from 4.7% in February.
The number of job openings was little changed at 7.2 million in March but was down by 901,000 over the year. The job openings rate, at 4.3 percent, changed little over the month. The number of job openings decreased in federal government (-36,000).
JOLTS: Hires
Hires as a percent of nonfarm employment was at 3.4% in March, unchanged from February.
In March, the number and rate of hires were unchanged at 5.4 million and 3.4 percent, respectively. The number of hires was little changed in all industries in March.
JOLTS: Quits
Quits as a percent of nonfarm employment was at 2.1% in March, up from 2.0% in February.
In March, the number of quits was unchanged at 3.3 million. The quits rate was little changed at 2.1 percent. Quits decreased in transportation, warehousing, and utilities (-49,000).
JOLTS: Layoffs
Layoffs as a percent of nonfarm employment was at 1.0% in March, down from 1.1% in February.
In March, the number of layoffs and discharges edged down to 1.6 million and the rate was little changed at 1.0 percent. Layoffs and discharges decreased in retail trade (-66,000) and in federal government (-11,000). Layoffs and discharges increased in state and local government, excluding education (+17,000).
The Business Cycle and JOLTS
Based on the six-month moving averages, we can see that:
- The job openings moving average is above the hires levels.
- Job openings are below their all-time high, trending down, and nearing their pre-pandemic levels.
- Hires are below their all-time high, trending down, and are now below pre-pandemic levels.
- Quits are below their all-time high, trending down, and are now below pre-pandemic levels.
- Layoffs and discharges continue to slowly rise but remain just below pre-pandemic levels.
The relationship between quits and layoffs
Increases in quits suggest employment flexibility and confidence among workers. Quits tend to be inversely correlated with layoffs/discharges, which are associated with economic downturns. From the Great Recession to the COVID pandemic, the quite rate steadily increased while layoffs/discharges declined and then remained stable for years. During the COVID pandemic, layoffs and discharges hit record highs while quits moved in the opposite direction. As the economy rebounded, quits reached an all-time high in March 2022 in what has been called "The Great Resignation" while layoffs/discharges dropped to record lows. Quits have since fallen below pre-pandemic levels, while layoffs and discharges are gradually rising.
It would, of course, be excellent if we had historical JOLTS data stretching back through several business cycles. However, the BLS only began tracking this data in December 2000. The time frame is quite limited compared to the main BLS data series in the monthly employment report, many of which go back to 1948, and the enormously popular non-farm employment (PAYEMS) series goes back to 1939. Nevertheless, there are some clear JOLTS correlations with the most recent business cycle trends.
The JOLTS reports is interesting to watch, but the volatility of the data, which is also subject to revisions, encourages caution in taking the data for any given month very seriously.
Here's our list of monthly employment updates:
Employment Situation Summary
ADP Employment Report
Unemployment Claims
Civilian Labor Force, Unemployment Claims, and the Business Cycle
Long-Term Trends by Age Group
Aging Work Force
Ratio of Part Time and Full-Time Employment
Multiple Jobholders
Workforce Recovery Since Recession
Read more updates by Jen Nash
