The Job Openings and Labor Turnover Survey (JOLTS) is a monthly economic report providing a detailed view into the United States labor market. This survey moves beyond simple employment counts to capture the dynamic flow of workers into and out of positions, offering a measure of labor demand that is otherwise unavailable. Understanding JOLTS data is a powerful way for economists, policymakers, and business leaders to gauge the overall health and direction of the national economy. The information reveals how actively businesses are seeking to expand their workforce and the confidence workers have in securing new employment.
Defining the JOLTS Survey
The JOLTS report is compiled and released monthly by the Bureau of Labor Statistics (BLS), an agency within the U.S. Department of Labor. The survey collects data from a representative sample of approximately 21,000 nonfarm business establishments across the 50 states and the District of Columbia. Unlike other labor reports that focus on static employment numbers, JOLTS measures the flows of the labor market. It provides a comprehensive indicator of the unmet demand for labor, covering all nonagricultural industries in both the private sector and government entities.
The Three Core Metrics of JOLTS
The survey is built upon three primary measurements: job openings, hires, and separations. Each metric offers a distinct perspective on employer activity and worker movement. Analyzing the magnitude and rate of change within these three components provides insight into the pace of labor market expansion or contraction. The data is presented as both a total count and a rate, which is the count expressed as a percentage of total employment.
Job Openings
A job opening is defined as any currently unfilled position for which the employer is actively recruiting outside candidates. To be counted, the position must exist, work must be available, and the job must be ready to start within 30 days. This metric provides a direct measure of labor demand that has not yet been satisfied by the market. Fluctuations in job openings are seen as a forward-looking indicator, signaling businesses’ future expectations for production and growth.
Hires
The hires metric represents the total number of additions to the payroll throughout the month, including both full-time and part-time workers. This count includes new employees, temporary workers, and those returning after a separation. A high level of hiring indicates that businesses are successfully filling vacancies and that the labor market is moving efficiently. The relationship between job openings and hires helps determine the average time employers take to fill an open position.
Separations
Separations represent the total number of employees who left their jobs during the month, broken down into three subcategories: quits, layoffs and discharges, and other separations. This component is insightful because it differentiates between voluntary and involuntary departures, reflecting underlying economic confidence.
The quits metric tracks voluntary separations initiated by the employee. The quits rate is a watched indicator of worker confidence. When the quits rate is high, it signals that workers feel secure enough to leave their current job, often for better pay or opportunities elsewhere. An elevated quits rate is associated with periods of economic expansion and potential wage pressure.
Layoffs and discharges account for involuntary separations, typically initiated by the employer. This category includes terminations due to poor performance or mass layoffs due to economic factors or restructuring. A sharp increase in the rate of layoffs and discharges suggests a weakening economy and potential contraction. The final category, other separations, includes retirements, transfers, deaths, and disability.
Interpreting the Data: Key Economic Insights
The movements in the JOLTS data offer a rich narrative about the overall health of the economy, providing context for unemployment figures. When the job openings rate is rising while the unemployment rate is falling, labor demand is outpacing the available supply of workers. This dynamic suggests a tightening labor market where employers must compete intensely for talent.
The relationship between the three core metrics can reveal the degree of “churn” within the labor force. If openings, hires, and quits are simultaneously high, it indicates a high level of employee turnover rather than significant net job growth. This rapid movement is a symptom of workers seeking better opportunities and employers struggling to retain staff, often leading to upward wage pressure.
Conversely, when job openings are falling and layoffs are rising, it suggests that businesses are pulling back on hiring plans and reducing their existing workforce. This pattern is a precursor to economic contraction, signaling that employer confidence in future demand is diminishing. Policymakers use these indicators as a demand-side gauge to assess whether the economy is overheating or cooling down.
Understanding JOLTS Ratios and Labor Market Tightness
Economists use JOLTS data to calculate specific ratios that quantify labor market tightness, measuring the balance between worker supply and demand. The most frequently cited calculation is the ratio of Unemployed Persons to Job Openings. This ratio is derived by dividing the number of unemployed individuals (from the Current Population Survey) by the number of job openings (from JOLTS).
A ratio of 1.0 indicates a theoretical equilibrium where there is one unemployed person for every available job opening. A ratio significantly less than 1.0, such as 0.6, signals an extremely tight labor market with substantially more openings than unemployed people actively looking for work. Conversely, a ratio greater than 1.0 indicates a slack labor market, where multiple unemployed people compete for each available position.
JOLTS data is also used to plot the Beveridge Curve, a graphical representation illustrating the inverse relationship between the unemployment rate and the job openings rate. As the economy expands, data points move toward lower unemployment and higher job openings; during a recession, they move toward higher unemployment and lower openings. Shifts in the curve indicate changes in labor market efficiency, suggesting whether unemployed workers are being successfully matched with available jobs.
Data Collection and Survey Limitations
The information for the JOLTS report is gathered through a voluntary survey of businesses, which report their total employment, job openings, hires, and separations for the reference month. Data collection involves methods such as Computer-Assisted Telephone Interviewing (CATI) and web-based reporting. The reliance on a survey of establishments means the data is subject to certain limitations.
One limitation is the time lag in the data, meaning the report often reflects conditions from a month or two prior to its release. JOLTS is often described as looking in the “rearview mirror,” capturing historical conditions rather than the current state of the market. Furthermore, the initial estimates are frequently subject to substantial revisions in subsequent months. The BLS adjusts the JOLTS estimates by benchmarking them to the comprehensive employment data from the Current Employment Statistics (CES) survey.