The Job Openings and Labor Turnover Survey (JOLTS) data for September were released this morning. While often underappreciated, JOLTS supplies critical data for evaluating the labor market’s health.
September’s quits were unchanged from the previous month’s, at a rate of 1.7 percent of total employment. This level still needs to increase 35 percent to reach the December 2006 pre-recession peak.
Quits are useful to measure the economy’s health since workers are more inclined to leave their current jobs when they are confident they can find other work. With an unemployment rate that still hovers around 7.3 percent, there is not much hope for many people to find better employment. The unemployment rate is even higher, 22.2 percent and 12.5 percent, for teens and young adults respectively. These workers are the most likely to create churn in the labor market as they begin their careers.
The preliminary estimate for hires was a barely-changed rate of 3.4 from 3.3 the month before. While the United States is more than four years into recovery, the hires rate is the same as it was one year into recovery. Historically, demand for employment should be growing at this stage of recovery—not stagnating. This rate suggests that Employers are not confident enough to invest in the higher costs of hiring a new worker.
The United States is still 1.5 million jobs short of where it was in December 2007, right before the recession. Many of the jobs created since the recovery began have been part-time. Even though the total number of jobs in the economy has decreased, part-time jobs have increased since December 2007 by over 10 percent.
Job openings slightly increased to a rate of 2.8 percent of total employment plus open positions from a rate of 2.7. While the current rate is far better than it was during the lows of the recession, the rate could be at this level for other reasons. Many workers have been unemployed for so long that they now lack both the hard and soft skills necessary to be hired again. 51.9 percent of those unemployed have been without a job for over 15 weeks and 36.1 percent have been unemployed for over 6 months. These numbers would be even higher if the labor force participation rate was not down to 62.8 percent, the same level as 1977.
While the labor market is not getting worse, recent economic data show that the outlook is not improving either. Without pro-growth policies such as decreased labor regulations and lower personal and business taxes, the labor market will remain stagnant. In order to keep up with population growth and international competition, the U.S. economy and its workers cannot afford to settle for “not getting worse”.
