SBE Small Business & Entrepreneurship Council : The Latest Data on Job Openings and Labor Turnover

By SBE Council at 12 January, 2021, 2:09 pm

by Raymond J. Keating-

The latest 'Job Openings and Labor Turnover' report was just released by the U.S. Bureau of Labor Statistics, and it points to little of substance changing in November regarding job openings, new hires and the quits rate. Meanwhile, the bigger picture provides a reminder that the U.S. economy remains in a deep hole.

Job openings (seasonally adjusted) declined from 6.632 million in October to 6.527 million in November. As for the job openings rate (i.e., job openings divided by total employment plus job openings), it fell from 4.5 percent in October to 4.4 percent in November.

On the hiring front, hires increased from 5.912 million in October to 5.979 million in November.

Meanwhile, the quits rate can be seen as a measure of worker confidence, that is, when people are confident of getting another job or have another source of employment, the quits rate tends to rise. The quits rate remained unchanged in November at 2.2 percent.

Of course, each of these need to be put in perspective given the pandemic economy.

First, job openings have bounced back some since the big declines in March and April, but have remained in a range for the past five months still notably short of where things stood in November.

Source: Federal Reserve Bank of St. Louis, FRED

Second, hires dropped dramatically in March and April; then snapped back in May and June; and have remained steady since, basically at the pre-pandemic level.

Source: Federal Reserve Bank of St. Louis, FRED

Finally, the quits rate also has snapped back from the initial major decline as the pandemic hit. That might indicate some level of confidence persisting among workers in their view of the labor market - or at least, perhaps, where the labor market is headed.

Source: Federal Reserve Bank of St. Louis, FRED

In the end, the ultimate state of affairs - and the challenge faced - regarding jobs was partially captured at the end of this latest report from the BLS: 'Over the 12 months ending in November, hires totaled 70.7 million and separations totaled 75.9 million, yielding a net employment loss of 5.2 million. These totals include workers who may have been hired and separated more than once during the year.'

However, a more comprehensive look at the jobs picture from the monthly employment report points to jobs in the U.S. declining by 9 million to10 million from February 2020 to December 2020. Much work lies ahead for our economy and for elected leaders in terms of pursuing pro-growth policies to help businesses dig out of the sizable jobs hole that has resulted from the pandemic's shock and ongoing impact.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.