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  • Writer's pictureByron Gangnes

JOLTS to the Economy

Updated: Jun 4

Today saw the release of the January JOLTS data by the US Bureau of Labor Statistics. JOLTS (Job Openings and Labor Turnover Summary) data track, well, just that. How many job openings there were in January, and information on turnover: the number of hires and separations from employment for various reasons.

These days we are tracking the JOLTS for indications of how tight the labor market is and where it might be headed. The quick take on January's report is that the number of job openings has fallen back just a tad, but remains high. There were slightly more layoffs than in December, but they remain pretty low.

The Big Picture hasn't changed from recent months: There are a VERY large number of job openings these days, one indicator of how tight the US labor market is. Here is a graph of the difference between employment and open jobs on the one hand, and the size of the labor force on the other.

This is a meaningful measure of excess demand for labor, since it tells us how many bodies firms are willing to employ compared with the number of people working or available for work. In January there were about 5 million more jobs than workers.

There is considerable excess demand for labor compared with the pre-pandemic period, and that this has not really fallen off at all. The labor market is still very hot!

Part of this is due to strong business demand for workers, but part is also due to the failure of the labor force to recover to its previous level. But that's a story for another day...

Job openings data is available by industry, and taking a look at just a few, we can see that there are higher numbers of open jobs across the board compared with the number before the pandemic. Employees are particularly hard to come by in manufacturing, where the number of openings is about twice what it was in December 2019.

(BTW, what I have done in the graph is to "normalize" each industry's job openings to a value of one in December, 2019, so we can compare today's numbers relative to a common starting point. Also, because the data jumps around a lot from month to month--we say it is "noisy"--I am showing the average value over the past three months.)

These days the Federal Reserve is particularly concerned about the state of the labor market, because of upward wage pressure that tends to come when labor is in excess demand. The JOLTS data is just one of the federal datasets that can shed light on the state of the labor market. February data on jobs, employment, and unemployment is coming soon.

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