Posted April 09, 2013 by

Despite 500,000 Leaving Employment Market, Job Openings Surge by 300,000

Bureau of Labor StatisticsLast week’s employment report was quite disappointing as only 88,000 net jobs were created. The unemployment dropped from 7.8 to 7.7 percent, but the reason was that some 500,000 people left the labor force. If you’re not employed and not looking for employment then you aren’t counted in the ranks of the unemployed. Some of those who left the workforce came from the increasing number of Baby Boomers reaching retirement age but pretty clearly many came from those who would prefer to be working but gave up their search after reaching the conclusion that it was fruitless.

Today, the U.S. Bureau of Labor Statistics issued a report that should provide some comfort to those who are still looking for work as well as those who stopped but may re-start their search. According to the BLS, there were 3.9 million job openings on the last business day of February, up from 3.6 million in January, the U.S. Bureau of Labor Statistics reported today. The hires rate (3.3 percent) and separations rate (3.1 percent) were little changed in February. 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 February was 3.9 million, up from January. This was the highest number of job openings since May 2008. In February, the number of openings rose in health care and social assistance, accommodation and food services, and state and local government. The number of job openings increased in the Midwest region.

The number of job openings in February (not seasonally adjusted) was up over the year for total nonfarm and total private, and was little changed for government. Job openings increased over the year for construction, finance and insurance, accommodation and food services, and state and local government. The West region experienced an increase in job openings over the year.

Hires

In February, the hires rate was little changed at 3.3 percent. The hires rate also was little changed in all industries and in all regions over the month.

Over the 12 months ending in February, the hires rate (not seasonally adjusted) was little changed for total nonfarm, total private, and government. The hires rate decreased in professional and business services. The hires rate was little changed in all four regions.

Separations

Total separations includes quits, layoffs and discharges, and other separations. Total separations also is referred to as turnover. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations include separations due to retirement, death, and disability, as well as transfers to other locations of the same firm.

In February, the quits rate was unchanged at 1.7 percent. The quits rate also was unchanged for total private and government.

The number of quits (not seasonally adjusted) rose over the 12 months ending in February for total nonfarm and was essentially unchanged for total private and government. The quits level increased over the year in accommodation and food services and in the South.

The layoffs and discharges component of total separations is seasonally adjusted at the total nonfarm, total private, and government levels and for the four regions. The layoffs and discharges rate was little changed in February at 1.2 percent. The rate also was little changed for total private, government, and all four regions.

The layoffs and discharges level (not seasonally adjusted) was little changed for total nonfarm, total private, and government over the 12 months ending in February 2013. Over the year, the number of layoffs and discharges fell in professional and business services and rose in federal government. The number of layoffs was little changed in all four regions.

In February, there were 326,000 other separations for total nonfarm, down from the previous month. The number of other separations for total private was little changed, while the number decreased in government. Over the 12 months ending in February, the number of other separations was essentially unchanged for total nonfarm, total private, and government.

Net Change in Employment

Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. When the number of hires exceeds the number of separations, employment rises, even if the hires level is steady or declining. Conversely, when the number of hires is less than the number of separations, employment declines, even if the hires level is steady or rising. Over the 12 months ending in February 2013, hires totaled 52.0 million and separations totaled 50.1 million, yielding a net employment gain of 1.9 million. These figures include workers who may have been hired and separated more than once during the year.

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