The June Job Openings and Labor Turnover Survey (JOLTS), released today by the Bureau of Labor Statistics, provides evidence that the recovery continues to edge in the right direction. While job openings in June increased by 105,000, unemployment that month increased by 29,000 (unemployment data are from the Current Population Survey and can be found here). This means that the “job-seekers ratio”—the ratio of unemployed workers to job openings—fell slightly (by one-tenth), to 3.4-to-1.
The ratio has been slowly but steadily improving since reaching its peak of 6.7-to-1 in summer 2009. However, the odds are still stacked strongly against job seekers; a job-seekers ratio above 3-to-1 means that for more than two out of three unemployed workers, there simply are no jobs. In fact, the job-seekers ratio is still above the high point in the last business cycle of 2.9-to-1 in September 2003.
The JOLTS data are particularly useful for diagnosing the cause of today’s persistent high unemployment. The figure below shows the number of unemployed and the number of job openings by sector. Unemployed workers far outnumber job openings in every sector. This underscores that by far the main cause of today’s persistent high unemployment 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.
Though hires fell in June (by 100,000), they are on a slow upward climb, up 18.5 percent since the official start of the recovery in June 2009. But hiring still has a long way to go before it returns to healthy levels. For example, hiring is still 16.0 percent below its 2007 average.
Both layoffs and voluntary quits also fell in June, with layoffs declining by 149,000 and voluntary quits by 63,000. If the economy were healthier, we would expect a larger number of voluntary quits, which would signal that workers are more confident about outside job opportunities. Voluntary quits are also on a general upward climb, having increased 20.7 percent since June 2009. But they too have a long way to go; they are still 26.8 percent below their 2007 average.
—With research assistance from Natalie Sabadish and Hilary Wething