The September Job Openings and Labor Turnover Survey (JOLTS), released today by the Bureau of Labor Statistics, showed job openings declined in September by 100,000, to 3.6 million. On the other hand, the number of unemployed workers dropped 456,000 in September to 12.1 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—was unchanged in September from the revised August ratio of 3.4-to-1.
The job-seekers ratio has been improving fairly steadily since its peak of 6.7-to-1 in summer 2009. Despite this improvement, odds remain stacked against job seekers; the ratio has been 3-to-1 or greater for four years, since September 2008. A job-seekers ratio above 3-to-1 means there are no jobs for more than two out of three workers.
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.
Voluntary quits declined in September by 175,000, a substantial drop. However, voluntary quits have been on a general upward climb in the recovery, which is good news because more voluntary quits signal that workers are better able to find attractive alternative job opportunities. It is likely that September’s drop is the result of month-to-month variation in the data rather than a reversal of the slow-but-steady upward trend.
Layoffs decreased by 147,000 in September. This is positive news, although layoffs are not currently a primary concern; as this figure shows, layoffs have been at pre-recession levels for the last two years.
The real concern is hiring. Despite being up significantly since the official start of the recovery in June 2009, hiring still has long to go before it returns to healthy levels, as it remains 19.4 percent below its 2007 average. In September, hiring dropped by 255,000, a sizable backslide. However, hiring has been on a steady upward climb, and just like voluntary quits, it is likely September’s drop is the result of month-to-month variation in the data rather than a reversal of the slow-but-steady upward trend.
However, September’s drop in hiring underscores the rocky nature of the recovery and the fact that we have far to go. Persistently low hiring means unemployment durations remain extremely high. Allowing emergency unemployment compensation (EUC) benefits to lapse (as is currently scheduled to happen at the end of this year) would be premature and destructive, and would cost hundreds of thousands of jobs.
—With research assistance from Natalie Sabadish and Hilary Wething