What Is JOLTS: Understanding Job Market Dynamics
Master JOLTS data to understand labor market trends, job openings, and employment dynamics.
What Is JOLTS: A Comprehensive Guide to the Job Openings and Labor Turnover Survey
The Job Openings and Labor Turnover Survey, commonly known as JOLTS, is one of the most important economic indicators for understanding the health and dynamics of the American labor market. Conducted monthly by the U.S. Department of Labor’s Bureau of Labor Statistics (BLS), JOLTS provides detailed insights into employment demand, worker mobility, and labor market conditions across the nation. While many people are familiar with headline unemployment rates and monthly job creation figures, JOLTS offers a more nuanced picture of how businesses are hiring, how many positions remain unfilled, and how workers are moving between jobs.
Understanding JOLTS data is essential for policymakers, business leaders, economists, and workers who want to gauge labor market tightness and make informed decisions about hiring, career moves, and economic policy. This comprehensive guide explores what JOLTS measures, how the survey works, what the data reveals, and why it matters in today’s economy.
Understanding the Basics of JOLTS
What Does JOLTS Stand For?
JOLTS stands for the Job Openings and Labor Turnover Survey. It is a monthly survey administered by the Bureau of Labor Statistics that measures employment trends from the demand side of the labor market. Unlike the more commonly cited unemployment rate, which focuses on job seekers, JOLTS examines the perspective of employers—specifically, how many jobs they have available and how their workforces are changing through hiring and separations.
Who Conducts JOLTS?
The Bureau of Labor Statistics, a division of the U.S. Department of Labor, conducts the JOLTS survey. Each month, BLS surveyors contact approximately 21,000 business establishments of all sizes across all 50 states and Washington D.C. These establishments represent both public and private sectors across all nonagricultural industries, ensuring that JOLTS data provides a comprehensive view of the labor market.
Key Metrics Measured by JOLTS
JOLTS collects and reports data on several critical labor market variables. Understanding each metric helps paint a complete picture of employment dynamics:
Job Openings
Job openings represent all positions that are open on the last business day of the reference month. To be counted as a job opening, a position must meet three specific criteria: a specific position must exist with work available, the job could start within 30 days, and the employer must be actively recruiting workers from outside the establishment to fill the position. This metric is forward-looking and indicates unmet demand for labor, making it particularly valuable for assessing future hiring needs.
Hires
The hires metric tracks the number of new employees that establishments brought on during the entire month. This includes both permanent hires and temporary workers. By comparing hires to job openings, analysts can estimate how quickly firms are able to fill vacant positions and assess the efficiency of the hiring process.
Quits
Quits represent voluntary resignations by employees. This metric is particularly important for understanding worker confidence and labor market conditions. When quits are elevated, it often signals that workers feel confident about finding alternative employment, suggesting a tight labor market where workers have bargaining power.
Layoffs and Discharges
This metric encompasses separations initiated by employers, including both layoffs and discharges. Tracking layoffs and discharges provides insight into employer demand for labor and economic conditions. Rising layoffs can signal weakening economic conditions, while declining layoffs suggest stable employment.
Other Separations
Other separations include employee departures beyond quits, layoffs, and discharges, such as retirements and deaths. While typically smaller in volume, this category completes the picture of workforce changes.
How JOLTS Data Is Collected
The JOLTS survey employs a rigorous methodology to gather accurate labor market data. The BLS collects information through a comprehensive program involving multiple stages and approaches. Initially, the Regional Data Collection Centers (DCCs) conduct new sample unit solicitation to enroll establishments via telephone. Once enrolled, these establishments provide data through Computer Assisted Telephone Interviewing (CATI) for several months, after which respondents are transferred to web reporting where possible.
Each month, establishments report several pieces of information: the number of full- or part-time employees who worked or received pay for the pay period including the 12th of the month, the number of job openings on the last business day of the month, the number of hires for the entire month, the number of quits, and the number of layoffs and discharges.
Interpreting JOLTS Data: Key Ratios and Indicators
Job Openings to Hires Ratio
One of the most useful metrics derived from JOLTS data is the ratio of job openings to hires. A ratio of one indicates that for every job opening, there is one hire, and firms are generally able to hire within 30 days. Ratios greater than one mean there are more job openings than hires, suggesting it takes longer to fill positions. The higher this ratio, the greater the difficulty employers face in recruiting, indicating a tight labor market where talented workers have multiple options.
Job Openings Rate
The job openings rate is calculated by dividing job openings by the sum of job openings and employment. This metric points to the portion of desired jobs that remain unfilled. A higher job openings rate suggests workers have numerous employment options, creating a more favorable labor market for workers. Conversely, a lower rate indicates fewer opportunities and a labor market that favors employers.
Unemployed Persons Per Job Opening Ratio
This critical ratio expresses the relationship between labor supply (unemployed people) and labor demand (job openings). Values less than one suggest a tight labor market with more job openings than unemployed workers, meaning workers have strong bargaining power. Ratios larger than one indicate labor market slack, with more unemployed workers than available jobs, giving employers more leverage in hiring decisions.
What JOLTS Reveals About Labor Market Conditions
Demand-Side Indicators
The BLS refers to JOLTS data as ‘demand-side’ indicators of the labor market. Two data elements speak directly to demand: hires show how many new employees establishments hired each month, while job openings provide a forward-looking measure of unmet demand for labor. Together, these metrics help economists and business leaders understand the true state of labor demand in the economy.
Understanding Labor Market Tightness
JOLTS data helps assess labor market ‘tightness’—whether there are abundant job opportunities or abundant workers seeking employment. By analyzing job openings rates, unemployment-to-openings ratios, and hiring patterns, stakeholders can determine whether the labor market is favorable for workers or employers. During tight labor markets, workers enjoy more choices and higher wages, while slack labor markets give employers more negotiating power.
Assessing Employment Turnover
Elevated levels of hires, quits, and job openings can indicate high employment ‘churn’—workers frequently leaving jobs and companies backfilling positions. Understanding churn helps businesses anticipate hiring needs, budget for recruitment costs, and develop retention strategies. High churn can indicate either worker dissatisfaction or abundant opportunities, depending on the broader context.
Regional Analysis and Labor Market Comparison
JOLTS data is particularly valuable for regional analysis, as the survey provides information for all 50 states and Washington D.C. Comparing JOLTS metrics between regions reveals important differences in labor market conditions. For example, during the tight labor market following the pandemic, Connecticut’s unemployed worker per job opening ratio was higher than most of the U.S., indicating that while workers were scarce compared to historical levels, the labor market was less strained than in other regions.
Additionally, regional quit rates can be compared to assess workforce stability. Lower quit rates suggest a more stable workforce for employers, while higher quit rates indicate greater worker mobility and confidence. These regional comparisons provide valuable context for businesses considering expansion, relocation, or recruitment strategies.
JOLTS and the Great Resignation
JOLTS gained widespread attention during 2021 and 2022, when job openings and quit rates reached all-time highs in what became known as the Great Resignation. This period saw unprecedented numbers of workers voluntarily leaving their jobs, often in search of better pay, working conditions, or career opportunities. JOLTS data proved instrumental in documenting this historic labor market shift, demonstrating the power of the survey in capturing significant economic changes.
Limitations of JOLTS Data
No Occupational Breakdown
One limitation of JOLTS is that it does not collect occupation information. The Current Population Survey (CPS) and the Occupational Employment and Wage Statistics (OEWS) program publish employment statistics by occupation, but neither program collects comprehensive data on job openings by occupation, limiting analysis of labor shortages in specific fields.
Relationship to Other Employment Measures
While JOLTS implied employment change (hires minus separations) and the Current Employment Statistics (CES) over-the-month employment change are conceptually similar and generally track well over time, the series can diverge in the short term due to methodological differences, different definitions, and distinct estimation procedures.
Practical Applications of JOLTS Data
For Business Leaders
Business leaders can use JOLTS metrics to understand the relative availability of workers in their region, estimate how long it may take to hire qualified candidates, and gauge the degree of turnover and competition for talent. This information informs hiring budgets, recruitment strategies, and compensation decisions.
For Job Seekers
Workers can monitor JOLTS data to understand labor market conditions in their region and industry. High job openings rates and low unemployment-to-openings ratios indicate favorable conditions for job seekers, suggesting more negotiating power in salary discussions and benefits packages.
For Policymakers
JOLTS data helps policymakers assess whether the economy is operating at full employment, whether labor shortages exist, and what interventions might be necessary. This information informs monetary policy, workforce development initiatives, and immigration policy discussions.
Frequently Asked Questions About JOLTS
Q: How often is JOLTS data released?
A: JOLTS data is released monthly by the Bureau of Labor Statistics, typically about a month after the reference period ends. This provides timely information about labor market conditions.
Q: How far back does JOLTS data go?
A: JOLTS data is available from December 2000 onward, providing over two decades of historical labor market information for trend analysis and comparison.
Q: Why is JOLTS important compared to the unemployment rate?
A: While the unemployment rate measures joblessness, JOLTS measures labor demand from the employer’s perspective. JOLTS provides a more complete picture by showing unfilled jobs, quit rates, and hiring patterns that the unemployment rate alone cannot capture.
Q: Can JOLTS data be broken down by occupation?
A: No, JOLTS does not collect occupation information. Other BLS programs like the Current Population Survey and Occupational Employment and Wage Statistics provide occupational employment data, though they do not comprehensively track job openings by occupation.
Q: How does JOLTS relate to the employment situation report?
A: JOLTS and the employment situation report are complementary. The employment situation report (based on CES data) shows monthly employment changes, while JOLTS provides additional detail on the components of those changes through job openings, hires, and separations.
Conclusion
The Job Openings and Labor Turnover Survey represents a critical tool for understanding American labor market dynamics. By measuring job openings, hires, quits, layoffs, and other separations, JOLTS provides demand-side indicators that complement traditional employment statistics. Whether you’re a business leader, job seeker, policymaker, or economist, JOLTS data offers valuable insights into labor market conditions, regional variations, and employment trends. As labor markets continue to evolve, JOLTS remains an essential resource for making informed decisions about hiring, career planning, and economic policy.
References
- Using JOLTS Data to Understand Regional Labor Markets — Advance Connecticut. https://www.advancect.org/research/jolts/
- Job Openings & Labor Turnover Survey (JOLTS) — New York State Department of Labor. https://dol.ny.gov/job-openings-labor-turnover-survey-jolts
- JOLTS Report — Wikipedia. https://en.wikipedia.org/wiki/JOLTS_report
- Job Openings and Labor Turnover Survey (ICPSR 36545) — Inter-university Consortium for Political and Social Research. https://www.icpsr.umich.edu/web/NADAC/studies/36545
- JOLTS Frequently Asked Questions — U.S. Bureau of Labor Statistics. https://www.bls.gov/jlt/jltfaq.htm
- JOLTS Home — U.S. Bureau of Labor Statistics. https://www.bls.gov/jlt/
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