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What is the JOLTS report: Yahoo U

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The monthly jobs report (also called the "employment situation") gets a lot of attention for its comprehensive read on the state of unemployment in the United States.

But a lesser known report known as the Job Openings and Labor Turnover Survey (JOLTS) offers more detail into labor market churn, showing the flow of people in and out of jobs and the movement of people from one job to another.

Put together, the two reports (both produced by the Bureau of Labor Statistics) offer context on the “tightness” of the labor market — the ease by which people can find work.

The JOLTS report is released on a lag; the JOLTS data covering a given month is usually published about a month after the employment situation (covering that same month) is published.

What’s in the JOLTS report?

The JOLTS report is comprised of data from a sample of about 16,000 U.S. businesses and covers all nonagricultural industries across the country.

JOLTS includes a few major data points:

Job openings: A measure of all open and unfilled positions that the business is actively recruiting for as of the last business day of the month.

Hires: A measure of all payroll additions in a given month, regardless of full-time/part-time status or seasonality.

Separations: All employees that were cut from payroll in a given month.

How does JOLTS account for people who leave jobs?

People can leave jobs for a number of different reasons, which is why the JOLTS report breakout “separations” based on the reason for a person no longer being on payroll.

Quits: Employees who left voluntarily, perhaps for another job.

Layoffs: Those that were involuntarily terminated by the employer, due to layoffs or firings. Also covers furloughs expected to last more than a week, in addition to the termination of seasonal employees.

Other separations: Those that are no longer on payroll due to retirements, transfers to other jobs, or death.

Employees that are on strike are not classified as “separated.”

How should one interpret JOLTS data?

Unlike the jobs report, which offers a detailed snapshot of the employment (or unemployment) picture, JOLTS shares detail on the flow in and out of the labor market in a given month.

By sharing insight into how many jobs are available and the ability of workers to move from one job to another, JOLTS data captures the ease by which people are able to find jobs (if unemployed) or move to better jobs (if already employed).

For example, if JOLTS data show few job openings and low turnover, the labor market is “loose” from the employers’ perspective. In this kind of environment, a hiring company has a relatively easy time finding a qualified candidate because there’s a competitive pool of prospective workers bidding for the same jobs.

But if JOLTS data show many job openings and high turnover, the labor market is “tight” from the employers’ perspective. In this kind of environment, it is more difficult for a hiring company to fill a role because many other firms are bidding for workers from a smaller pool of people. High turnover also implies a labor market where it is harder to retain workers.

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