JOLTS Shows Jobs Static - 3.1 Unemployed Per Opening in April 2013

The BLS April JOLTS report, or Job Openings and Labor Turnover Survey shows there are 3.1 official unemployed per job opening, the same as the last two months.  Every month it is the same story, a static dead pool job market with employers clearly not hiring.  Job openings declined -3.0% from last month to a total of 3,757,000.  People hired did increase by 4.7% to 4,425 million.  Yet, real hiring has only increased 22% from June 2009.  Job openings are still below pre-recession levels of 4.7 million.  Job openings have increased 72% from July 2009.  The story for jobs is the same flat line drum beat, over and over.  There is never enough actual hiring in addition to not enough openings.

There were 1.8 official unemployed persons per job opening at the start of the recession, December 2007.  Below is the graph of the official unemployed per job opening.  The official unemployed ranked 11,659 million in April 2013.

If one takes the official broader definition of unemployment, or U-6, the ratio becomes 5.8* unemployed people per each job opening.  The April U-6 unemployment rate was 13.9%.  Below is the graph of number of unemployed, using the broader U-6 unemployment definition, per job opening.

We have no idea the quality of these job openings as a whole, as reported by JOLTS, or the ratio of part-time openings to full-time.  The rates below mean the number of openings, hires, fires percentage of the total employment.  Openings are added to the total employment for it's ratio.

• openings rate:   2.7%
• hires rate:  3.3%
• separations rate:   3.2%

• fires & layoffs rate:   1.2%
• quits rate:  1.7%
• other rate:  0.3%

Graphed below are raw job openings.  Job openings are still below the 4.7 to 4.3 million levels of 2007.

Since the July 2009 trough, actual hires per month have only increased 22%.  This is simply terrible and the most important indicator in our view for employers are clearly refusing to increase hiring, across the board and thus not recover from our jobs crisis.  Businesses can say there are job openings, but if they do not hire an American and fill it, what's the point?  Additionally the hires rate, for all sectors and all regions has been static for the entire year.

Below are total job separations, 4.279 million, an increase of 3.8% from last month.  The term separation means you're out of a job through a firing, layoff, quitting or retirement.

Layoffs and firings were 1.653 million, a -2.0% decrease from last month.  Below is a graph of just layoffs and firings.    One can see from labor flows while businesses are not thrashing their workforce so much, they are also not adding to their payrolls.

Graphed below are openings separations and hires levels, so we can compare the types of labor flows.  While layoffs have declined to pre-recession levels, it is the flat line hires (blue) that is the problem, beyond not enough job openings (red) for the unemployed.  There is simply not enough hiring going on to get people back to work.  Anyone who claims a labor shortage is also easily disproved by these figures.  A labor shortage would imply more job openings than unemployed available to fill them.

One thing rarely mentioned in the press is the pathetic annual job gains.  Job gains below 2 million with these persistently high unemployment levels means the job crisis seemingly is without end.

Over the 12 months ending in April 2013, hires totaled 52.0 million and separations totaled 50.2 million, yielding a net employment gain of 1.8 million. These figures include workers who may have been hired and separated more than once during the year.

Graphed below are people who quit their jobs minus those who were fired and laid off.  The lower the bar on the below graph, the worse labor conditions are.  The number of quits were 2.251 million, a 7.2% increase from last month.   People quit their current jobs often to obtain better ones.  People feeling free enough to leave their current position also hasn't changed much for the year.  Additionally quit statistics are still way below pre-recession levels of 2.8 million, although quits has increased 39% from the September 2009 low of 1.5 million.  People are clearly not voluntarily leaving their jobs because the job market is bad, even though the jobs slaughter of 2009 where people were laid off and fired in mass is over.

Below is a graph of the quits to layoffs ratio, currently at 1.36.  This ratio of people who quit their jobs vs. those who were fired gives an indicator of worker churn as well as if there might be a shortage.  If the ratio is below 1.0, this means more people are being laid off and fired than people who quit.  When the ratio is much higher, this means more people quit their jobs and thus implies there is better opportunity elsewhere and workers feel free enough to move on.  The quits to fires ratio was 1.8 in 2006.  The health care and social assistance sector has remained above 1.0 in this ratio, implying there are plenty of jobs.  The construction industry, on the other hand, has a quits to layoffs ratio of below 1.0, implying getting fired from your construction job is routine.

The BLS was kind enough to make a credible Beveridge Curve graph, reprinted below.   The Beveridge curve shows the official unemployment rate vs. the job openings rate, over time.   If you see a bunch of data points to the far right, that's bad, it means there is long term unemployment and not enough jobs.   Up and left in the Beveridge curve is good, it means there are jobs, people are getting hired, life is good.   A right and up move in the Beveridge curve can indicate a skills mismatch.  Look at how we're stuck to the right, but down, which means, pure and simple, there are not enough jobs and we're just not expanding enough for more jobs. The green, representing the 2009 time period, shows how fast we went to the right.  The purple line is 2010-2013 and means we are stuck in job market malaise.   Look at how the purple line just kind off flips around but is a fundamental shift to the right side of the graph.   That's our new static, dead pool labor market.

For the JOLTS report, the BLS creates some fairly useful graphs beyond the above and they have oodles of additional information in their databases, broken down by occupational area.  That said, one doesn't know if the openings are quality jobs from the JOLTS statistics.  The St. Louis Federal Reserve also had loads of graphing tools for JOLTS.

The JOLTS takes a random sampling of 16,000 businesses and derives their numbers from that.  The survey also uses the CES, or current employment statistics, not the household survey as their base benchmark, although ratios are coming from the household survey, which gives the tally of unemployed.

The April 2013 unemployment rate was 7.5%.  JOLTS includes part-time jobs and does not make a distinction between part-time, full-time openings.  A job opening reported to the survey could literally be take out the trash twice a week and be counted.  This is a shame, it would be nice to know a little more about the quality of these new opportunities.  Here are our past JOLTS overviews, unrevised.

*$\small U-6$ is defined as the official unemployed plus people who are in part-time jobs for economic reasons plus the marginally attached.  The marginally attached $\small M$, are officially not part of the civilian labor force, $\small CLF$, and also not seasonally adjusted.  The above graph was created by the seasonally adjusted levels of the unemployed, part-time for economic reasons and the marginally attached, raw totals.  Another way to calculate this figure is:
$\small \frac{(CLF + M) * U-6} O$
where
$\small O=\text {Job Openings}$

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minor BLS discrepancy

hires minus separations should equal the revised April payroll number of 149,000 we saw last week, but it's 3,000 less

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rjs

good question

I've never checked the history of this survey against the employment report. They are separate surveys though, taken at different times, with different sampling amounts.

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