Why More People Quitting Their Jobs Is A Good Economic Indicator

There were 3.4 million job openings on the last business day of
September, the U.S. Bureau of Labor Statistics reported today. The
hires rate (3.2 percent) and separations rate (3.2 percent) were
little changed over the month. The job openings rate has trended
upward since the end of the recession in June 2009 (as determined by
the National Bureau of Economic Research). This release includes
estimates of the number and rate of job openings, hires, and
separations for the nonfarm sector by industry and by geographic
region.

Job Openings

The number of job openings in September was 3.4 million, up from 3.1
million in August. Although the number of job openings
remained below the 4.4 million openings when the recession began in
December 2007, the level in September was 1.2 million higher than in
July 2009 (the most recent trough for the series). The number of job
openings has increased 38 percent since the end of the recession in
June 2009.

The number of job openings in September (not seasonally adjusted)
increased over the year for total nonfarm, total private, and
government. Several industries experienced an increase over the year
in the number of job openings; the number of job openings decreased
for federal government. The number of job openings rose in 3 out of 4
regions.

Hires

In September, the hires rate was little changed at 3.2 percent for
total nonfarm. The hires rate increased in construction and
professional and business services as well as in 3 out of 4 regions.
The number of hires in September was 4.2 million, up
from 3.6 million in October 2009 (the most recent trough) but below
the 5.0 million hires recorded when the recession began in December
2007. The number of hires has increased 17 percent since the end of
the recession in June 2009.

Over the past 12 months, the hires rate (not seasonally adjusted) was
little changed for total nonfarm, total private, and government. The
hires rate increased for construction and professional and business
services. The hires rate increased in the Midwest and decreased in the
Northeast.

Separations

The total separations figure includes voluntary quits, involuntary
layoffs and discharges, and other separations, including retirements.
Total separations is also referred to as turnover.

The seasonally adjusted total separations rate was little changed in
September for total nonfarm, total private, and government. Over the year,
the total separations rate (not seasonally
adjusted) increased for total nonfarm and total private but decreased
for government.

The quits rate can serve as a measure of workers’ willingness or
ability to change jobs. In September, the quits rate was essentially
unchanged for total nonfarm, total private, and government.
The number of quits rose from 1.5 million in January 2010 (the
most recent trough) to 2.0 million in September, although it remained
below the 2.8 million recorded when the recession began in December
2007.

The number of quits (not seasonally adjusted) in September 2011
increased from 12 months earlier for total nonfarm and total private
and was essentially unchanged for government. Several industries
experienced an increase in the number of quits over the year.

The layoffs and discharges component of total separations is
seasonally adjusted only at the total nonfarm, total private, and
government levels. The layoffs and discharges rate remained unchanged
in September for total nonfarm and government. The rate was little
changed for total private. The number of layoffs and discharges for
total nonfarm has declined to 1.8 million in September 2011 from 2.5
million in February 2009 (peak), returning to pre-recession levels.

The layoffs and discharges level (not seasonally adjusted) for total
nonfarm and total private were little changed but declined over the 12
months ending in September 2011 for government. Over the year, the
number of layoffs and discharges was little changed for most
industries and in all four regions.

The other separations series is not seasonally adjusted. In September
2011, there were 329,000 other separations for total nonfarm, 276,000
for total private, and 53,000 for government. Compared to September
2010, the number of other separations was down for government and the
South region.

Relative Contributions to Separations

The total separations level is influenced by the relative contribution
of its three components—quits, layoffs and discharges, and other
separations. Other separations is historically a very small portion of
total separations; it has rarely been above 10 percent of total
separations. The percentage of total separations attributable to the
individual components has varied over time at the total nonfarm level,
but for the majority of the months since the series began in December
2000, the proportion of quits has exceeded the proportion of layoffs
and discharges. For most of the months between November 2008 and
November 2010, however, the proportion of layoffs and discharges was
equal to or greater than the proportion of quits. Since November 2010,
the series have returned to their historical pattern. In September
2011, the proportion of quits for total nonfarm was 49 percent, and
the proportion of layoffs and discharges was 42 percent.

Net Change in Employment

Large numbers of hires and separations occur every month. Over the 12
months ending in September 2011, hires totaled 48.3 million and
separations totaled 47.0 million, yielding a net employment gain of
1.3 million based on not seasonally adjusted data. These figures
include workers who may have been hired and separated more than once
during the year.