The April Job Openings and Labor Turnover Survey (JOLTS), released today by the Bureau of Labor Statistics, underscores the sluggishness of the recovery, showing that job openings declined by 325,000 in April. Given April’s drop in unemployment of 173,000 (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—increased by three tenths, to 3.7-to-1.
Despite this increase, the ratio has been slowly but steadily improving since its peak of 6.7-to-1 in summer 2009, and it is likely that April’s increase represents month-to-month variability in the data rather than a reversal of that overall trend. 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.
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.
Unsurprisingly, given the drop in job openings, hires also declined in April, by 160,000. Looking at the data over time, however, hires nevertheless are on a slow upward climb, up 13.5 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 19.6 percent below its 2007 average.
Voluntary quits decreased by 89,000 in April (lower levels of voluntary quits are not good news, since they signal that workers are less confident about outside job opportunities). However, voluntary quits are also on a general upward climb, having increased 18.3 percent since June 2009. But they too have a long way to go; voluntary quits are still 28.2 percent below their 2007 average.
Layoffs also increased slightly in April, by 68,000. Despite April’s increase, the number of layoffs remains at a “normal” level; in fact, it is still below the 2007 average. While the consequences of being laid off are much more severe now due to limited job availability, the likelihood of being laid off is no greater now than before the Great Recession started.
With research assistance from Nicholas Finio and Hilary Wething