December 21, 2018
Measuring Job Openings in the U.S. Labor Market
Introduction
a specific position exists and there is work available for
The number of job openings is an economic indicator that
that position;
can provide information about the potential strength or
weakness of the labor market. It is often used in addition to
the job could start within 30 days, and
two other commonly cited labor market indicators: the
unemployment rate and total employment. The
the establishment is actively recruiting outside workers.
unemployment rate—the number of individuals without a
job but looking for work, as a share of the labor force—
JOLTS does not include the following when recording job
measures excess labor supply, while total employment—the
openings: positions open only to internal transfers,
number of filled jobs—is one measure of labor demand.
promotions or demotions, or recalls from layoffs; openings
While these two measures provide information about the
for positions with start dates more than 30 days in the
strength of the labor market, neither directly measures the
future; positions for which employees have been hired but
number of job openings.
the employees have not yet reported for work; and positions
to be filled by employees of temporary help agencies,
Interest in job openings, or job vacancies, has increased
employee leasing companies, outside contractors, or
recently and is cited frequently in the media and during
consultants.
congressional hearings. Part of this interest is due to the
number of job openings in the United States reaching its
Current Trends in Job Openings
highest level since the data collection started in 2000—7.1
The number of job openings reported by JOLTS rose
million—in August 2018. Additionally, the number of job
throughout the early 2000s, fell during the recession of
openings recently surpassed the number of unemployed
2007–2009, and then steadily increased to above pre-
persons, which has not occurred since data started being
recession levels. In August 2018, job openings hit a high of
collected in 2000. This change has caused Congress, the
7.1 million. The job openings rate, calculated as the number
media, and the public to direct more attention to job
of job openings divided by the sum of the number of
openings.
nonfarm employees and the number of job openings, has
followed a trend similar to the number of job openings. The
How Are Job Openings Data Collected?
rate was 3.4 when data collection began in December 2000,
The number of job openings has long been used as
bottomed out at 1.7 in the summer of 2009, and has been
supplementary information in estimating the health of the
steadily climbing since, reaching a high of 4.7 in
labor market. From 1951 to 2008, the Conference Board
August 2018.
produced a Help-Wanted Advertising Index (HWI) of print
advertisements, which measured the change in the number
Increases in job openings typically indicate a growing
of help-wanted advertisements in 51 major U.S.
economy with high levels of job creation when combined
newspapers, serving as a proxy for the change in job
with a declining unemployment rate. Job openings may
openings. From April 1969 to December 1973, the Bureau
signal other economic trends depending on changes in other
of Labor Statistics (BLS) reported monthly job openings
indicators. A high and increasing number of job openings
rates as part of its Labor Turnover Survey (LTS), but the
may be a sign of full employment, especially when the
job openings questions of the LTS were discontinued in
unemployment rate is extremely low, or it may be an
1973 due to funding cuts. Following a few standalone pilot
indication of a mismatch between supply and demand in the
programs to conduct ongoing surveys of job openings, BLS
labor market if openings only increase in certain economic
began consistently collecting data on job openings in 2000
sectors or geographic areas.
through the Job Openings and Labor Turnover Survey
(JOLTS). JOLTS collects monthly data from a sample of
High levels of job openings may also occur when the
16,000 business establishments. In addition to job openings,
economy is not expanding rapidly. For example, the cost of
data on new hires (i.e., new employees, not internal
advertising job openings has decreased with the growth of
transfers or promotions), and job separations (i.e.,
the internet. With new technology, it is easier for firms to
employees whose positions were eliminated or who quit,
keep a vacancy open longer (with almost costless
retired, or were laid off or fired) are collected.
advertising for the position) while waiting for the employee
with the optimal combination of skills and salary
Job openings are defined in JOLTS as the total number of
requirements for the open job.
positions open on the last business day of the month. A job
opening exists if:
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Measuring Job Openings in the U.S. Labor Market
Combining the job openings data with hires and
“unemployed” only includes people currently searching for
unemployment data may provide additional context and
work in the past month. It does not count individuals out of
insight into the underlying trends in the labor market.
the labor force (people not working and not actively
searching for work) or those involuntarily working fewer
Job Openings and Hires
hours than they would prefer. The persistence of a high
The JOLTS data also include the number of hires, defined
level of job openings may indicate an unmet demand for
as all additions to the payroll during the month. Job
workers. This could be a result of a mismatch (e.g., skill,
openings and hires are closely related—when a person is
compensation, geographical) between unemployed job
hired to an open position, the corresponding job opening
seekers and prospective employers or it may indicate a
disappears. Because of this relationship, an increase in hires
shortage of workers currently in the labor market and
may be a sign that labor shortages represented by the job
available to fill openings.
openings indicator are being resolved. Consequently, these
two variables are often compared as shown in Figure 1.
Figure 2. Unemployed Persons per Job Opening
Figure 1. Total U.S. Nonfarm Job Openings and Hires
(In thousands)
Source: Bureau of Labor Statistics, Job Openings and Labor
Turnover Survey (JOLTS), and Current Population Survey (CPS)
Source: Bureau of Labor Statistics, Job Openings and Labor
The Relationship between Job Openings, Hires, and
Turnover Survey (JOLTS)
Unemployment
While detailed examination of the numerous causes of a
The relationship between job openings and hires has
possible labor shortage is beyond the scope of this In Focus,
changed in recent years. From 2000 to 2015, the number of
there are several factors that may play a role in determining
hires had always been larger than the number of job
the relationship between the numbers of job openings, hires,
openings; however, after 2015 job openings have
and unemployed persons. Demographic changes, such as an
consistently exceeded hires. In September 2018, the gap
aging population and a declining fertility rate, may reduce
between the number of job openings (7.1 million) and the
the size of the labor force and contribute to a gap between
number of hires (5.8 million) reached its highest level since
supply of and demand for workers. Changes in immigration
openings first surpassed hires in 2015. This gap may
patterns may affect the supply of available workers,
indicate the economy’s declining ability to address the
particularly in sectors in which immigrant labor
potential labor shortages represented by the high level of
traditionally constitutes a sizeable share of the labor force
job openings.
(e.g., agriculture). Changes in demand for certain skills
(e.g., cybersecurity) may create gaps between the demand
The Number of Unemployed Workers and
in certain occupations and the availability of skilled
Job Openings
workers needed to fill these jobs. Changes in the health of
It is intuitive to expect job openings to be filled by
the labor force, such as the ongoing opioid epidemic, may
unemployed persons (defined as people who are not
contribute to, and also be a consequence of, decreased labor
working but are currently searching for work). Because of
force participation or impaired performance of workers in
this relationship, the unemployment to job openings ratio—
the labor market. Some argue that wage growth has been
the number of unemployed persons divided by the number
insufficient to attract potential workers into the labor force,
of job openings (shown in Figure 2)—is often used as a
making it more difficult to meet the demand seen in hires
proxy measure to provide information on the labor market’s
and openings. Changing preferences on the part of workers
ability to resolve labor shortages.
and the desire for very specific sets of skills on the part of
employers may also contribute to potential labor shortages.
During the 2007–2009 recession, this ratio rose rapidly,
indicating multiple workers available for each existing job
David H. Bradley, Specialist in Labor Economics
opening. During the most recent recovery, this ratio has
Boris Granovskiy, Analyst in Education Policy
been steadily decreasing. By April 2018, the ratio fell
below 1.0 for the first time since the JOLTS series began.
IF11054
This means that theoretically there is a job available for
every unemployed person in the labor market. Note that
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Measuring Job Openings in the U.S. Labor Market
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