Why 7 Million US Job Openings May Look Weaker Than It Sounds

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There are still 7.0 million openings in America, as of the last day of September. While this reading is lower than the original estimate of 7.1 million job openings on the last day of August, the August peak figure was revised to 7.3 million. This is an estimated drop of 284,000 from August. While a decline of this magnitude sounds large, the August revision was much higher, and this was actually the third straight reading at or above 7.0 million.

The so-called JOLTS report from the Bureau of Labor Statistics (BLS) showed that hires and separations were both little changed at 5.7 million in September. It also showed that the job openings rate was 4.5% in September. The number of hires in September was down from a revised series high of 5.9 million in August. This put the hires rate at 3.8% in September. The BLS report said of September:

Within separations, the quits rate was unchanged at 2.4 percent and the layoffs and discharges rate was little changed at 1.1 percent. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions.

The number of job openings fell by 188,000 for total private sector jobs and fell by 96,000 for total government jobs. Job openings were higher in health care and social assistance for a total of 71,000. Meanwhile, professional and business services openings fell by 118,000 and the finance and insurance job openings fell by 82,000. The number of state and local government job openings (excluding education) fell by 67,000 in September.

Perhaps the greatest number behind the job openings is the so-called quits rate. These are generally voluntary separations initiated by the employee, and employees have to be willing to leave on their own accord for more applicable or better opportunities for there to be a solid jobs market. The number of quits was 3.6 million in September, and the quits rate was 2.4%. Quits increased by 15,000 in educational services, but there were 20,000 fewer quits in the transportation, warehousing and utilities section. State and local government education saw 10,000 fewer quits.

After tallying up all the numbers for this September versus September of 2017, the number of hires over the year was 67.5 million versus 65.1 million separations. That yields a net employment gain of 2.5 million year over year. What must be considered further is that the total figures do include workers who may have been hired and separated more than once during the period.

It may sound disappointing to have fewer job openings swing this much lower in a single month. That said, the large figure looks exaggerated when considering that the August figure was revised much higher and considering that employers are having a harder time filling their positions.

And for further evidence of economic strength meeting job market strength, it was just last week that ZipRecruiter sent out a post-BLS figure from its own job postings marketplace: there were more than 1.5 million job postings in its own universe that require no prior experience at all.