Why the JOLTS jobs report affects companies like Boeing
The JOLTS report
The JOLTS report is the United States Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey. The headline number is job openings. The Bureau collects data from employers, including retailers, manufacturers, and different offices, each month. Respondents to the survey answer quantitative and qualitative questions about their businesses’ employment, job openings, recruitment, hires, and separations. The JOLTS data is published monthly and by region and industry.
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The JOLTS report defines “job openings” as “all positions that are open on the last business day of the month.” A job is considered “open” only if the opening exists and there’s work available for that position, the job could start within 30 days, and active recruiting is on. “Active recruiting” means the establishment is taking steps to fill the position.
At the same time, job openings don’t include positions open only to internal transfers, promotions or demotions, or recalls from layoffs, positions with start dates more than 30 days in the future, positions for which hired employees haven’t yet reported for work, or positions to be filled by employees of temporary help agencies.
With the release of January’s data on March 11, JOLTS showed 4.0 million job openings on the last business day of January, little changed from December. The hires rate (3.3%) and separations rate (3.2%) were also little changed in January. JOLTS defines “hires” as “all additions to the payroll during the month.” JOLTS defines “separations” as “all employees separated from the payroll during the calendar month.” The number of openings showed little changed in the total private and government sector. The number of job openings decreased in the retail trade, while the number increased in healthcare and social assistance and in arts, entertainment, and recreation.
Although lagging the release timing of the employment situation report by a month, JOLTS provides additional information on the labor market. The payroll survey in the employment situation report provides numbers on net job changes. JOLTS breaks down the labor market data into pre-net changes—such as job openings, hires, and separations.
Since industrial companies are the major contributors to the job market, the performance of ETFs tracking the industrial sector is affected by a positive or negative trend in the JOLTS report. The performance of industrials ETFs like the SPDR Industrial Select Sector Fund (XLI), which has companies like General Electric Co. (GE) and Boeing Co. (BA) in its portfolio, the Vanguard Industrials Index Fund (VIS), and the iShares Dow Jones US Industrial Sector Index Fund (IYJ) serves as a good indicator of the industrial sector.
To learn more about important jobs releases and how they affect your investments, see ADP signals a good payroll report, which could hurt REITs.