The February Job Openings and Labor Turnover Survey (JOLTS), released today by the Bureau of Labor Statistics, shows job openings increased in February to over 3.9 million, a rise of 314,000 since January. The number of job openings has generally improved since reaching its low of 2.2 million in July 2009. Job openings are now as high as in April 2008, and have exceeded their post-recession peak of 3.8 million in March 2012.
While job openings are similar to where they were about five years ago, the number of job seekers is still much higher. In February, the number of job seekers, which fell by 300,000 from January, stood at 12.0 million (current unemployment data are from the Current Population Survey and can be found here). The “job-seekers ratio”—the ratio of unemployed workers to job openings—fell in February to 3.1-to-1 from 3.4-to-1 in January.
Hires also rose in February, increasing by 120,000 to over 4.4 million. Unlike job openings, hires are still below their early 2012 levels. On the flip side, layoffs increased by 95,000 in February to 1.6 million. While layoffs are not currently the primary concern in the labor market (having been at prerecession levels for more than two years), that there are greater layoffs is not good news. Furthermore, the consequences to workers of being laid off are far worse now than before the recession began; they are less likely to find a new job within a reasonable timeframe, particularly one that pays as much as the job lost.
As shown in the figure below, the job-seekers ratio has improved fairly steadily since reaching its peak of 6.7-to-1 in July 2009. Despite this improvement, odds remain stacked against job seekers; the ratio has been 3.1-to-1 or greater for more than four years. A job-seekers ratio above 3-to-1 means there are no jobs for more than two out of three unemployed workers. To put today’s ratio of 3.1-to-1 in perspective, it is useful to note that the highest the ratio ever got in the early 2000s downturn was 2.9-to-1 in September 2003. In a labor market with strong job opportunities, the ratio would be close to 1-to-1, as it was in December 2000 (when it was 1.1-to-1).
The JOLTS data are also useful for diagnosing what’s behind our persistently high unemployment. In today’s economy, unemployed workers far outnumber job openings in every sector. This demonstrates that the main problem is a broad-based lack of demand for workers—and not, as is often claimed, available workers lacking the skills needed for the sectors with job openings.
—With research assistance from Natalie Sabadish and Hilary Wething