• Why More People Quitting Their Jobs Is A Good Economic Indicator

    November 09, 2011 by

    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.

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