The December Job Openings and Labor Turnover Survey (JOLTS), released today by the Bureau of Labor Statistics, shows job openings dropped in December to 3.6 million, a decline of 173,000. The number of job openings, which had been improving fairly steadily since reaching its low of 2.2 million in July 2009, has stalled in recent months; there has been no improvement since March 2012.
Hires also dropped in December, falling by 209,000 to 4.2 million. Like job openings, hires have made no progress since early 2012. Layoffs were the one bright spot in today’s report, decreasing by 132,000 in December to 1.6 million. Layoffs are not currently the primary concern in the labor market, having been at prerecession levels for more than two years. However, that there are fewer layoffs is definitely good news; because job openings and hiring remain so depressed, the consequences to workers of being laid off—specifically, the low odds of finding a new job within a reasonable timeframe, particularly one that pays as much as the job lost—are far worse now than before the recession began.
In December, the number of job seekers increased by 164,000, to 12.2 million (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—increased in December to 3.4-to-1 from a revised 3.2-to-1 in November.
The job-seekers ratio has been improving 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 3.2-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 3.4-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