Hiring rates differ across economic sectors
As we’ve often discussed on this blog, the U.S. labor market is pretty active, with high turnover. Turnover differs quite a bit across sectors, though. In the graph above, which covers hiring rates, we did something that’s usually not recommended: cramming seven(!) series in a single graph. Yet, FRED’s features still allow us to distinguish what’s happening. Hover over a legend and you’ll see the relevant line light up, making it easier to find. Hover over the graph and you’ll see a list of data points for a particular month. Or you can draw a bar graph, which we did below.
These two graphs highlight the large disparities across sectors: Construction, hospitality, and professional services have hiring rates on the order of 5-7% of their workforce every month. The rate for government is below 2% (except for a spike related to the decennial census), and the rate for manufacturing isn’t far from that. Once you drill down into sub-sectors, you can find even more disparity, from 9.2% (June 2001) for arts, entertainment, and recreation to 0.6% (January 2012) for the federal government (but 14.7% in May 2010 with the aforementioned census).
By the way… If we would have made this graph using the separation rate, it would have looked roughly the same. Indeed, imagine the labor market as a bathtub: The hiring rate is the faucet that pours water in, and the separation rate is the drain that pulls water out. With the pool of employed workers roughly equal from month to month, the hiring and separation rates must roughly match or else the bathtub would either overflow or empty itself. So, currently, a higher hiring rate is simply a sign of a higher turnover rate; both the faucet and the drain are larger.
How these graphs were created: Search for “JOLTS hiring” and use the left sidebar to filter results: We used only seasonally adjusted national series that show the rates of hiring. Select the series you want and then click “Add to Graph.” For the second graph, start with the first and select the last year of data (“1Y”); then go to “Edit Graph”/”Format” and change the graph type to “bar.”
Suggested by Christian Zimmermann.