The October Job Openings and Labor Turnover Survey (JOLTS), released today by the Bureau of Labor Statistics, showed job openings increased in October by 128,000, to 3.7 million. However, the number of job seekers also increased in October—170,000 were added to the ranks of the unemployed, bringing the October total to 12.3 million (unemployment data are from the Current Population Survey and can be found here). Taken together, this means the “job-seekers ratio”—the ratio of unemployed workers to job openings—ticked down slightly in October to 3.3-to-1 from the September ratio of 3.4-to-1.
The job-seekers ratio has been improving fairly steadily since its peak of 6.7-to-1 in July 2009. Despite this improvement, odds remain stacked against job seekers; the ratio has been 3-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 3.3-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, showing 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.
Layoffs decreased by 68,000 in October. This is positive news, although layoffs are not currently the primary concern; as this figure shows, despite month-to-month volatility in the data, layoffs have been at prerecession levels for the last two years. The primary concern in the labor market is hiring. Hires increased by 135,000 in October, but that was simply a partial rebound from the large drop in September; hires have made no progress since the first quarter of this year. This lack of progress is bad news because there is a long way to go before hiring returns to healthy levels, as it remains 16.4 percent below its 2007 average.
The severity of job loss in the Great Recession, combined with weak hiring in its aftermath, means that we face an ongoing crisis of long-term unemployment. This country still has 4.8 million workers who have been unemployed for more than six months, four times as many as the 1.2 million average in 2007. Apart from the Great Recession, the share of unemployed workers who have been unemployed for more than six months is still far above the highest level of any recession in the last 70 years. At the end of this year, federally funded extended unemployment insurance (UI) benefits are set to expire. If they aren’t renewed, 2 million workers receiving federal unemployment benefits will be immediately cut off, and that number rises to 5 million if you take into account all of 2013. Renewing the federally funded unemployment insurance benefit extensions through the end of 2013 (when the unemployment rate is still expected to be well over 7 percent) would not only extend a lifeline to the families of millions of long-term unemployed workers, it would also generate spending that would support around 400,000 jobs. If this program is discontinued, the economy will lose these jobs. For more details, see the recent EPI report Labor market will lose 400,000 jobs in 2013 if UI extensions expire.
—With research assistance from Nicholas Finio and Hilary Wething