Content provided in partnership with

Business Services Industry

The Job openings and labor turnover survey: what initial data show: early results from these new data series show trends that are in line with other surveys, both private industry and government, and allow for a more complete picture of the labor market

Monthly Labor Review, Nov, 2004 by Kelly A. Clark

Data on job openings and labor turnover are useful in understanding the U.S. labor market, the business cycle, and the economy in general. The Bureau of Labor Statistics (BLS) began publishing such estimates in July 2002. These data include a measure of unmet labor demand, which complements the broadest measure of excess labor supply, the unemployment rate, and yields a more complete picture of the labor market. Hires and separations, measures of labor turnover, track labor market movements over the course of the business cycle and allow individual businesses to compare their own turnover rates with the national rates.

Most Popular Articles in Business: Research and Markets : Tesco Plc - SWOT Framework Analysis; Do Us a Flavor - Ben & Jerry's Issues a Call for Euphoric New Flavors; eBay made easy: ready to start an eBay business? These 5 simple steps will ...; Katrina's lawsuit surge: a legal battle to force insurers to pay for flood ...; Wal-Mart's newest distribution center opened last month near the southwest ...; More »

This article provides an overview of the estimates from the Job Openings and Labor Turnover Survey (JOLTS). (1) It briefly describes the JOLTS program, highlights what job openings and labor turnover data reveal about the labor market and the economy, and compares and contrasts the JOLTS series with other comparable data series to understand and, in part, validate movements in the JOLTS data. Ongoing and future uses for these valuable new data series are also discussed.

The JOLTS program

BLS has collected both job openings and turnover information in several different surveys during the past 50 years. However, these surveys were short-lived due to budget cuts, and the scope was limited to certain industries or States. The current JOLTS program began in 1999 as a comprehensive survey of job openings, hires, and separations at a time when new data were needed to allow further analysis into the U.S. labor market and movements in the economy. (2)

JOLTS collects monthly job openings, hires, and separations data from a nationally representative sample of 16,000 private and public business establishments. Job openings are collected as of the last business day of the month, serving as a snapshot of unmet labor demand for the month. Hires and separations are collected for the entire month and measure the flow of labor during the month. Total separations are the sum of three components: quits (or voluntary separations); layoffs and discharges (involuntary separations); and other separations resulting from retirements, deaths, and disability.

The job openings rate is designed to complement the unemployment rate. There are three conditions for an opening to be reported in JOLTS, just as there are three conditions for a person to be considered unemployed. To be considered a job opening, a job must be currently available, work for the job could start within 30 days, and an employer must be actively recruiting to find someone to fill the job. To be considered unemployed, a person must be available for work, could start work immediately, and must be actively searching for work.

JOLTS estimates were first released in July 2002, and monthly estimates are available beginning with December 2000. In addition to the national totals, seasonally unadjusted estimates are published for the private and public sectors, for 16 private industry divisions, and for 2 public industry divisions based on the North American Industry Classification System (NAICS). Estimates for four geographic regions also are available. Seasonally adjusted estimates are available for job openings, hires, total separations, and quits at the total nonfarm level as well as for the regions and selected industry sectors. (3) Neither layoffs and discharges nor other separations showed a strong seasonal component, but these data series, as well as the remaining unadjusted industry series, will be re-evaluated periodically to determine if and when seasonal adjustment is possible.

The JOLTS data series were first published as developmental because the estimates from the new program were subject to intense scrutiny and review, and BLS needed time to conduct a thorough methodological review before announcing the series as official BLS labor market statistics. In addition, the entire sample of establishments was not enrolled in the survey until January 2002, and collection methods were refined in March 2002 to help respondents more accurately report separations data.

In April 2004, the developmental status was lifted, and seasonally adjusted data series were first released along with monthly press releases, which provided some analysis of the estimates. Also, the production process was altered to allow preliminary, or first closing, estimates to be released; previously, final, or second closing, estimates had been released. Even throughout the period when the series were classified as developmental, the individual series showed movements that were in line with other economic indicators and with the cyclical movement of the economy. Although BLS advises caution when using estimates prior to March 2002, those estimates are useful in evaluating the state of both the labor market and economy in general during the recessionary period and the beginning of the recovery.

Labor demand and the Beveridge curve

Statistics on job openings are a necessary complement to the BLS unemployment data for a complete picture of the labor market; job openings data represent unmet labor demand and unemployment data represent excess labor supply. The parallel concept of these two data sources allows direct comparisons. In theory, job openings should move in the opposite direction of unemployment over the course of the business cycle. In good economic times, the labor market tends to be tight, with employers searching for employees, but most people who want a job already are employed. Unemployment tends to be low and openings tend to be high. However, when economic conditions worsen, employers are hesitant to post openings for "new" jobs, and the few openings for existing jobs tend to be filled quickly. Unemployment is usually higher due to reduced hiring and increased layoffs in response to weak demand.

Business Services Industry

The Job openings and labor turnover survey: what initial data show: early results from these new data series show trends that are in line with other surveys, both private industry and government, and allow for a more complete picture of the labor market

Monthly Labor Review, Nov, 2004 by Kelly A. Clark

Find Research Guides for:

Find Featured Titles for: Health

Most Popular Articles in Business

Most Popular Publications in Business