Data is collected from a sample of employers each month. This sample comes from a database of about 9.1 million businesses that provide a good or service. This can include factories, mines, stores, or offices. JOLTS collects a number of data points from these businesses. The first is job openings, which counts the number of unfilled jobs on the last business day of the month. To count as a job opening, the role must meet three conditions: The position must exist and work must be available for it; the job could begin in 30 days; and the establishment must be actively recruiting workers from outside its location. Businesses surveyed also report the number of newly hired employees as well as separations, which include quits, layoffs, discharges, death, and disability. These criteria exist to understand the current unmet demand for labor. Estimates are summarized in a monthly JOLTS report. This data is available by region and industry, but not by occupation. Occupational data is collected through the Current Population Survey.
Using JOLTS To Measure Labor Market ‘Tightness’
A measurement that is commonly used by economists to measure tightness in the labor market is the vacancies-to-unemployment ratio. This measure divides the number of vacancies (provided in the JOLTS) by the number of unemployed workers. If the ratio is 2-to-1, this means there are two vacancies for every unemployed worker. This would signal a very high amount of job openings compared to workers who are unemployed and looking for jobs. JOLTS data is also commonly used to show the correlation between the job openings rate and the unemployment rate. As the unemployment rate falls, there is a strong chance that the job openings rate will rise. Plotting these on a chart together forms the Beveridge Curve. This curve got a lot of attention during 2020 and 2021 as it shifted in the wake of the COVID-19 pandemic. The relationship between the job openings rate and unemployment rate was a bit weaker than in prior time periods, making it a great example of how JOLTS data can be useful to show how demand for labor has changed over time.
