Are There Really Now Far Fewer Job Openings in America?

Americans have heard for years now that the jobs market is getting better, that higher pay is available elsewhere and that the unemployment and payrolls were improving. Politicians running for office may have a different message, but the Bureau of Labor Statistics (BLS) is confirming that the number of job openings in American has shrunk handily.

The BLS uses the term “little changed” on its monthly employment data in most months. That may be true from a statistical basis, but it is quite different when considering whether you are actually out looking for a job.

Job openings decreased to 5.5 million as of the last business day of May, according to the BLS’s Job Openings and Labor Turnover Summary (JOLTS). A survey from Thomson Reuters was calling for May’s JOLTS report to come in at roughly 5.7 million. The BLS showed that the number of hires and separations were both “little changed” at 5.0 million. And their view on the quits rate, meaning how many people are quitting one job for another opportunity, was 2.0%. The layoffs and discharges rate was 1.2%.

So, to refute the “little changed” terminology, the BLS’s JOLTS report showed that the number of job openings was down by some 345,000 to 5.5 million in May. The prior three-month average change in job openings was a gain of 80,000, so does this still seem “little changed” like they say?

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The job openings rate in May 2016 was 3.7%. The number of job openings decreased for total private and was little changed for government. Job openings decreased in a number of industries, shown as follows:

• Wholesale trade (−104,000)
• Other services (−98,000)
• Real estate and rental and leasing (−53,000)
• In the regions, job openings decreased the most in the South and in the Midwest.

Hires and the so-called quits were shown to be as follows for May 2016:

The number of hires was little changed at 5.0 million in May. The hires rate was 3.5 percent. The number of hires was little changed for total private and for government. Hires were little changed in all industries and in all regions in May.

The number of quits was little changed in May at 2.9 million. The quits rate was 2.0 percent. Over the month, the number of quits was little changed for total private and for government. By industry, quits increased in educational services (+17,000). The number of quits increased in the Northeast region.

Layoffs and discharges were shown as follows:

There were 1.7 million layoffs and discharges in May, little changed from April. The layoffs and discharges rate was 1.2 percent. The number of layoffs and discharges was little changed over the month for total private and for government. Layoffs and discharges declined in state and local government  education (-15,000) and in mining and logging (-9,000). The number of layoffs and discharges was little changed over the month in all four regions.

The reason the quits rate and the job opening rate matters so much is complex. A simplified explanation is that there has to be job openings for new hires to take place, and people have to be willing and confident enough to quit their current job to move up for there to be a truly good labor market.

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The BLS offered up trailing 12-month data for a comparison to show just how weak this report was:

Over the 12 months ending in May, hires totaled 62.3 million and separations totaled 59.8 million, yielding a net employment gain of 2.5 million. These totals include workers who may have been hired and separated more than once during the year.

As a reminder, May’s payrolls data were among the weakest readings of the entire jobs recovery. It should also be noted that there was a sharp snap-back seen in June with much stronger than expected payrolls gains.