The August Job Openings and Labor Turnover Survey (JOLTS), released today by the Bureau of Labor Statistics, underscores the slow-but-steady nature of the recovery. At 3.6 million, job openings in August changed little from July (down 32,000). However, the number of unemployed workers dropped 250,000 in August to 12.5 million (unemployment data are from the Current Population Survey and can be found here), meaning that the “job-seekers ratio”—the ratio of unemployed workers to job openings—declined slightly to 3.5-to-1 from the revised July ratio of 3.6-to-1.
Because the job openings data are for August, they do not take into account the September drop in unemployment announced in last Friday’s jobs report, which showed the number of unemployed workers declining by 456,000. This drop means the job-seekers ratio likely declined further in September; for example, if the number of job openings simply changed in September by the average change of the prior three months (-32,000), the job-seekers ratio will have dropped to 3.4-to-1, continuing the improvement the ratio has been experiencing over the last three years. Despite this improvement, odds remain stacked against job seekers; the ratio has been 3-to-1 or greater since Sept. 2008.
The JOLTS data are also useful for diagnosing what’s behind our persistent high unemployment. 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 also changed little in August (- 23,000). Voluntary quits are on a general upward climb, however, which is good news since higher voluntary quits signal that workers are better able to find good outside job opportunities. Voluntary quits have increased 33.3 percent since their low in Sept. 2009. They still, however, have a long way to go; voluntary quits remain 25.8 percent below their 2007 average. Layoffs increased by 266,000 in August, though, as this figure shows, the layoff data have been very volatile in recent months, so the August increase is not yet any cause for concern.
A bright spot in the release was that hires increased by 112,000 in August. Hires are up 19.3 percent since the official start of the recovery in June 2009. However, hiring too has a long way to go before it returns to healthy levels, as it remains 15.4 percent below its 2007 average. Low hiring means unemployment durations remain extremely high. Allowing the 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 likely cost about 430,000 jobs.
—With research assistance from Natalie Sabadish and Hilary Wething