JOLTS and Jobless Claims Explained: Reading the US Labor Market
The monthly jobs report gets the headlines, but job openings, quits and weekly unemployment claims often show a shift in the labor market first. This guide explains what JOLTS and jobless claims measure, how to read them, and where each one can mislead.
The monthly jobs report tells you how many people were employed. It does not tell you how many jobs are open, how many workers are quitting for better offers, or how many people filed for unemployment last week. Two other releases fill those gaps: the JOLTS report and the weekly jobless claims report. Together they give a fuller picture of whether the US labor market is tightening, cooling or holding steady.
This guide explains what each one measures, how to read it, and why a single number should rarely be taken at face value.
Why the labor market matters to markets
Employment sits close to the center of the economy. It shapes household income and spending, feeds into wage growth and inflation, and influences how the Federal Reserve thinks about interest rates. A labor market that is cooling can support the case for lower rates, while one that is running hot can keep policymakers cautious. Investors watch these releases because they change expectations about growth, rates and corporate earnings.
Our guide to reading the jobs report covers payrolls and the unemployment rate. JOLTS and claims add detail on demand for workers and on layoffs.
JOLTS: what it is
JOLTS stands for the Job Openings and Labor Turnover Survey. The Bureau of Labor Statistics (BLS) collects it from a sample of employers and publishes it monthly. It reports, for the month:
- Job openings: positions that are open and that the employer is actively trying to fill.
- Hires: workers added to payrolls.
- Quits: workers who left voluntarily.
- Layoffs and discharges: workers let go by the employer.
- Total separations: all departures, including quits, layoffs and others such as retirements.
The BLS shows these as levels and as rates, meaning a share of total employment. Rates are usually easier to compare over time because the workforce changes in size.
How to read each JOLTS measure
Job openings show demand. More openings suggest employers are trying to hire; fewer suggest they are pulling back. Openings are a sign of intent, not of actual jobs. A posting can sit open for a long time, be listed in several places or never be filled.
Hires show what employers actually did. When openings stay high but hiring is weak, employers may be having trouble finding the right workers, or they may be advertising more than they plan to fill.
Quits show worker confidence. People are more likely to leave a job voluntarily when they expect to find another one, often at higher pay. A falling quits rate can mean workers are staying put because options look thinner.
Layoffs and discharges show stress. A rise matters most when it persists or when it comes alongside rising claims.
The openings-to-unemployed ratio. Analysts often compare job openings with the number of unemployed people, which is how many openings exist for each person looking for work. A higher ratio points to a tighter market for employers, and a lower one to a looser market. The BLS publishes data that make this comparison possible, and it is a useful summary of balance, not a forecast.
The limits of JOLTS
- It arrives with a delay. The report typically covers a month that ended well over a month earlier, so it is a look backward rather than a live reading.
- It is a survey. Responses come from a sample of employers, and the numbers are estimates that can be revised later.
- Openings are not jobs. A drop in openings does not necessarily mean job losses.
- Month-to-month moves can be noisy. Trends over several months are more informative than a single release.
Jobless claims: what they are
Initial jobless claims count the number of people who file for state unemployment insurance for the first time in a week. The Department of Labor publishes the figure weekly, usually on Thursday mornings, which makes it one of the most timely labor indicators.
The report also includes continuing claims, which count people who are still receiving unemployment benefits. Rising continuing claims can suggest that people who lose a job are taking longer to find a new one.
Because weekly figures bounce around, analysts often use a four-week moving average, which smooths out one-off swings caused by holidays, weather, strikes, or the timing of a plant shutdown.
How to read claims
- A steady range is normal. Claims move within a band when the labor market is stable. What matters is a sustained shift outside that band.
- A rise over several weeks is a signal. A single high week can be a blip; a rising four-week average draws more attention.
- Initial claims reflect layoffs. Continuing claims reflect how hard it is to get rehired.
- Seasonal adjustment matters. The headline figures are adjusted for patterns such as holiday shifts and the school year, but unadjusted data can look very different.
The limits of claims
- Not everyone files. Some laid-off workers are not eligible, such as certain new entrants, many gig workers and people who did not work long enough. Others never apply.
- State rules differ. Eligibility and benefit duration vary by state, and the data come from state systems.
- Fraud and processing quirks. Fraudulent filings, system updates and backlogs have at times distorted state numbers.
- It misses slow hiring. Claims measure layoffs, not employers who simply stop hiring, so a market can soften while claims stay low.
Putting the pieces together
No single indicator is reliable on its own, so analysts look at how they fit.
| Signal | What it can suggest |
|---|---|
| Openings falling, quits falling, claims flat | Employers pulling back on hiring without much layoff stress; workers staying put |
| Openings falling, claims rising | A softening labor market with growing layoffs |
| Openings steady, quits high, claims low | A labor market where workers feel confident |
| Hires weak, claims low | A "low-hire, low-fire" market, where companies hold on to staff but add few |
These are patterns people look for, not rules. Each can have other explanations, and revisions can change the story.
How markets tend to react
Stocks and bonds often respond to labor data because of what it implies for the Fed. Stronger-than-expected data can push up interest rate expectations, which tends to lift Treasury yields. Weaker data can do the opposite. The reaction depends on the starting point, though. Markets can cheer weak news if they expect rates to fall, or sell off on it if it raises recession fears. Our article on leading, lagging and coincident indicators explains why some data points to the future and some confirms the past.
A practical way to follow the data
- Look at trends, not single releases. Use three- to six-month views for JOLTS and the four-week average for claims.
- Compare with consensus carefully. News coverage often centers on whether a number beat expectations, which is different from whether the labor market is healthy.
- Use official sources. The BLS publishes JOLTS and the Department of Labor publishes claims, each with charts, definitions and revision notes.
- Read alongside other data. Pair these indicators with payrolls, wage growth and unemployment before drawing a conclusion.
Seen together, JOLTS and jobless claims show where hiring is heading and how much stress sits beneath the headline number. They are useful context for understanding the economy, not a signal to act on by themselves.
Frequently asked questions
What does the JOLTS report measure?
JOLTS, the Job Openings and Labor Turnover Survey, is published by the Bureau of Labor Statistics. It reports how many jobs employers have open, and how many people were hired, quit, were laid off or otherwise left their jobs during the month. It is a survey of employers, so it describes demand for workers rather than the number of people employed.
What are initial jobless claims?
Initial claims count the people who file for state unemployment insurance for the first time in a given week. The Department of Labor publishes the figure weekly, and it is often used as a quick read on layoffs. It does not capture people who are not eligible or who never file.
Why do economists watch the quits rate?
People tend to quit voluntarily when they are confident they can find another job, so a high quits rate can signal a strong labor market and a low one can signal caution. It is one clue among several and is read alongside hiring, openings and layoffs.
