Job openings unexpectedly jumped to a six-month high in May, reaching 7.769 million vacancies, according to the latest Job Openings and Labor Turnover Survey (JOLTS). This marks the second straight monthly increase and was higher than the expected 7.320 million openings. Meanwhile, hires and layoffs declined, and quits increased.
From the press release:
The number of job openings was little changed at 7.8 million in May, the U.S. Bureau of Labor Statistics reported today. Over the month, both hires and total separations were little changed at 5.5 million and 5.2 million, respectively. Within separations, quits (3.3 million) and layoffs and discharges (1.6 million) changed little.
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, 139,000 jobs were added in May and the unemployment rate remained at 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 May, there were 7.237 million unemployed workers and 7.769 million job openings. This equates to 1.07 jobs available per unemployed worker, significantly below pre-pandemic levels.
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 4.9% in May, up from 4.6% in April.
The number and rate of job openings were little changed at 7.8 million and 4.6 percent, respectively, in May. The number of job openings increased in accommodation and food services (+314,000) and in finance and insurance (+91,000). The number of job openings decreased in federal government (39,000).
JOLTS: Hires
Hires as a percent of nonfarm employment was at 3.4% in May, down from 3.5% in April.
In May, the number and rate of hires were little changed at 5.5 million and 3.4 percent, respectively. The number of hires decreased in federal government (-11,000).
JOLTS: Quits
Quits as a percent of nonfarm employment was at 2.1% in May, up from 2.0% in April.
In May, the number and rate of quits were little changed at 3.3 million and 2.1 percent, respectively. The number of quits was little changed in all industries in May.
JOLTS: Layoffs
Layoffs as a percent of nonfarm employment was at 1.0% in May, down from 1.1% in April.
In May, the number and rate of layoffs and discharges were little changed at 1.6 million and 1.0 percent, respectively. Layoffs and discharges decreased in finance and insurance (-47,000).
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, currently leveling off, and are now below pre-pandemic levels.
- Quits are below their all-time high, trending up, 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
