What Is Job Openings and Labor Turnover Survey (JOLTS)?
The Job Openings and Labor Turnover Survey (JOLTS) is a monthly report produced by the U.S. Bureau of Labor Statistics (BLS) that provides comprehensive data on job vacancies, hires, and separations within the American labor market. As a key macroeconomic indicator, JOLTS offers valuable insights into the dynamics of the labor market and the overall health of the U.S. economy. The survey collects data on the number of job openings, total hires, and total separations, which are further broken down into quits, layoffs and discharges, and other separations. JOLTS is often viewed as a demand-side indicator, helping to assess the unmet demand for labor and the tightness of the job market.22, 23
History and Origin
The Bureau of Labor Statistics began developing the Job Openings and Labor Turnover Survey (JOLTS) program in 1998 to address a critical need for data on unmet labor demand in the U.S. economy. Prior to JOLTS, there was no comprehensive measure of job vacancies.21 Data collection, estimation, and analysis commenced in 2000, and the first JOLTS data were publicly released in 2002, with monthly series extending back to December 2000.20 In 2004, the JOLTS program transitioned from an experimental series to an official BLS data series, solidifying its role as a regular and vital part of U.S. economic reporting.19 Over time, the program has expanded its scope to include more detailed industry sectors, establishment size classes, and official state-level estimates, which became an official series in 2021.17, 18
Key Takeaways
- The Job Openings and Labor Turnover Survey (JOLTS) is a monthly report from the U.S. Bureau of Labor Statistics (BLS).
- JOLTS provides data on job openings, hires, and different types of separations (quits, layoffs and discharges, other separations).16
- It serves as a demand-side indicator of the labor market, reflecting how much employers are looking to hire.14, 15
- The JOLTS report is crucial for understanding labor market tightness and turnover, offering insights into worker confidence and employer hiring activity.
- Data from JOLTS are used by policymakers, economists, and analysts to assess economic conditions and inform decisions.
Interpreting the JOLTS
Interpreting the Job Openings and Labor Turnover Survey (JOLTS) involves analyzing the various components to gauge the health and direction of the labor demand within the economy. A high number of job openings indicates strong demand for labor, suggesting that businesses are looking to expand or are struggling to fill existing positions. Conversely, a decline in job openings could signal a weakening economy.13
The hires figure represents the number of new employment relationships established during the month, which includes new hires, rehires, and transfers from other establishments within the same company. A rising hires rate often correlates with a healthy job market.12
Separations data, particularly quits, are closely watched. A high quits rate suggests that workers are confident in their ability to find better employment opportunities elsewhere, often indicative of a strong labor market. Conversely, an increase in layoffs and discharges may point to economic contraction or employer concerns about future demand.11 The ratio of unemployed persons per job opening is another critical metric derived from JOLTS, providing a direct measure of labor market tightness. A lower ratio suggests fewer unemployed individuals for each available job, indicating a tighter market for employers.9, 10
Hypothetical Example
Imagine a hypothetical economy experiencing robust economic growth. In this scenario, the JOLTS report might show a steady increase in job openings over several months, for instance, from 7 million to 8 million, as businesses expand and seek new employees. Concurrently, the number of hires would also trend upwards, perhaps from 6.5 million to 7.5 million, reflecting successful recruitment efforts.
Crucially, the quits rate could also be elevated, moving from 2.5% to 3.0% of total employment. This rise in quits signals that workers feel confident enough to leave their current jobs, likely for higher wages or better opportunities, without fear of prolonged unemployment. Meanwhile, layoffs and discharges would remain relatively low, for example, stable at 1.0% of employment, indicating that employers are retaining their staff amidst the strong demand. This combination of rising job openings, increased hires, and a high quits rate, coupled with low layoffs, would collectively paint a picture of a dynamic and tight labor market where labor demand significantly outstrips supply.
Practical Applications
The Job Openings and Labor Turnover Survey (JOLTS) is a crucial dataset with various practical applications across finance, economics, and policymaking. Analysts and investors closely monitor JOLTS data to understand the underlying strength of the labor market, which in turn influences consumer spending and corporate earnings. For instance, a persistent increase in job openings can signal a robust economy, potentially leading to higher wage growth and inflationary pressures.8
Central banks, such as the Federal Reserve, integrate JOLTS data into their analysis of economic conditions, particularly when formulating monetary policy. High job openings and a rising quits rate might suggest a tightening labor market, which could support a decision to raise interest rates to curb potential inflation.7 Conversely, a decline in job openings or an increase in layoffs and discharges could indicate economic weakness, potentially influencing decisions to lower rates or implement other stimulus measures. The Federal Reserve Bank of St. Louis's FRED database provides extensive JOLTS data series, which are widely used for economic research and analysis.6
Limitations and Criticisms
While the Job Openings and Labor Turnover Survey (JOLTS) provides valuable insights into labor market dynamics, it is important to acknowledge its limitations and criticisms. One notable aspect is that JOLTS data is released with a lag, typically about a month after the reference period, making it a retrospective tool rather than a real-time indicator.5 This can limit its utility for immediate market reactions compared to more timely reports.
Another consideration is the potential for sampling and nonsampling errors inherent in any survey-based data. While the Bureau of Labor Statistics employs rigorous methodologies, variations can occur between sample estimates and true population values.4 Additionally, the definition of a "job opening" requires that a specific position exists, is available, and could start within 30 days, and the employer is actively trying to fill it from outside the organization.3 This definition may not capture all forms of labor demand or future hiring intentions. Some research has also pointed to puzzling patterns in JOLTS data, particularly concerning the lack of reported vacancies at smaller establishments.2 Despite these limitations, the JOLTS report remains a critical component of assessing the overall business cycle and labor market health.
JOLTS vs. Non-Farm Payrolls
The Job Openings and Labor Turnover Survey (JOLTS) and the Non-Farm Payrolls (NFP) report are both critical U.S. labor market indicators produced by the Bureau of Labor Statistics, yet they measure different aspects. The NFP report, typically released earlier, provides a measure of the total number of paid employees in the U.S. excluding farm employees, government employees, private household employees, and non-profit organization employees. It is primarily an indicator of employment levels and changes in those levels, offering a broad picture of job creation or loss.
In contrast, JOLTS focuses on the dynamics of the labor market, providing data on job openings, hires, and various types of separations. While NFP tells you how many jobs were added, JOLTS explains why the labor market is changing—is it due to high demand (job openings), increased worker mobility (quits), or economic slowdowns (layoffs)? The JOLTS report supplements the NFP by providing a deeper understanding of labor fluidity and unmet labor demand, which NFP alone does not capture.
FAQs
What data does JOLTS include?
The Job Openings and Labor Turnover Survey (JOLTS) provides monthly data on job openings, total hires, and total separations. Separations are further broken down into quits, layoffs and discharges, and other separations (e.g., retirements, deaths).
Who publishes the JOLTS report?
The JOLTS report is published monthly by the U.S. Bureau of Labor Statistics (BLS), an agency of the U.S. Department of Labor.
1### How often is JOLTS data released?
JOLTS data is released monthly by the BLS, typically with a lag of approximately one month after the reference period.
Why are "quits" important in the JOLTS report?
The quits rate in the JOLTS report is a key indicator of worker confidence and labor market health. When the quits rate is high, it suggests that workers are voluntarily leaving their jobs, often because they have found better opportunities or are confident they can find new employment quickly. This signals a strong labor market where workers have leverage.