Economic Snapshot: Job openings, employment increase year-over-year

Job openings and voluntary separations are up year-over-year, as is nonfarm payroll employment, which begs for quite a bit of optimism going into 2015 when combined with small business optimism at pre-recession levels.

JOLTS

There were 4.834 million job openings on the last business day of October, which is little changed from 4.685 million in September but up 21 percent year-over-year when there were 3.996 million job openings. This is the ninth consecutive month of job openings above 4 million.

Hires and separations remained steady this month, at 5.055 million and 4.824 million respectively. However, total hires and separations increased over a twelve-month period ending in October 2014 when there were 4.512 million hires and 4.305 million separations.

Within separations, the quits levels increased 12 percent year-over-year. Combined with the high level of job openings, economists are calling this report “very positive.”

Employment situation

According to the Bureau of Labor Statistics, nonfarm payrolls increased by 321,000 in November. This marks the biggest single-month gain since January 2012 and the 10th consecutive month of payroll growth above 200,000.

The unemployment rate held steady at 5.8 percent and the number of unemployed persons was little changed at 9.1 million. However, the unemployment rate and number of unemployed persons decreased by 1.2 percentage points and 1.7 million, respectively.

The “U-6” unemployment rate, which includes those working part time for economic reasons or those marginally attached to the labor force, fell from 11.5 percent to 11.4 percent. In November 2013, the “U-6” unemployment rate was 12.7 percent.

Small business optimism

As reported earlier this week, small business optimism is at its highest level since February 2007, with a reading of 98.1. This is an increase of 2.0 points from the previous month. Expectations for business conditions and expectations for real sales volumes accounted for the entire gain, adding 16.0 and 5.0 points, respectively.

Job creation plans rose 1.0 point this month. Fifty-three percent of small-business owners reported hiring or attempting to hire, but 45 percent reported few to no qualified applicants.

This month’s reading continues very strong optimism in the index has seen throughout 2014. In December 2013, the index was 92.5.