Economic Indicators | Jobs and Unemployment

June JOLTS Data Show the Labor Market Remains Lukewarm Five Years Into the Recovery

Press release

The June Job Openings and Labor Turnover Survey (JOLTS) data released this morning by the Bureau of Labor Statistics (BLS) show that five years after the official start of the recovery in June 2009, the labor market remains lukewarm.

In a testament to how flat the numbers were, the BLS news release about the data used the phrase “little changed” 20 times. The good news is that what little change there was was in the right direction, with job openings up by 94,000, hires up by 92,000, and quits up by 47,000. The JOLTS data show a labor market that is improving at a modest, steady pace, but not accelerating.

Figure A shows the hires rate, the quits rate, and the layoffs rate. The first thing to note is that layoffs, which shot up during the recession, recovered quickly once the recession officially ended. Layoffs have been at prerecession levels for more than three years. This makes sense; the economy is in a recovery and businesses are no longer shedding workers at an elevated rate. But for a full recovery in the labor market to occur, two key things need to happen: Layoffs need to come down, and hiring needs to pick up. Hiring is the side of that equation that, while generally improving, has not yet come close to a full recovery. The hires rate ticked up a tenth of a percent in June to reverse the small drop it experienced in May, but it remains well below its prerecession level.

Another piece of the puzzle is voluntary quits. A larger number of people voluntarily quitting their job indicates a labor market in which hiring is prevalent and workers are able to leave jobs that aren’t right for them and find new ones. Voluntary quits, while slowly improving, are also nowhere near a full recovery. There are 15 percent fewer voluntary quits each month than there were before the recession began, and the quits rate has seen no improvement since last October. Low voluntary quits indicate that there are a large number of workers who are locked into jobs that they would leave if they could.

Figure A

Hires, quits, and layoff rates, December 2000–June 2014

Month Hires rate Layoffs rate Quits rate
Dec-2000 4.1% 1.4% 2.3%
Jan-2001 4.4% 1.6% 2.6%
Feb-2001 4.1% 1.4% 2.5%
Mar-2001 4.2% 1.6% 2.4%
Apr-2001 4.0% 1.5% 2.4%
May-2001 4.0% 1.5% 2.4%
Jun-2001 3.8% 1.5% 2.3%
Jul-2001 3.9% 1.5% 2.2%
Aug-2001 3.8% 1.4% 2.1%
Sep-2001 3.8% 1.6% 2.1%
Oct-2001 3.8% 1.7% 2.2%
Nov-2001 3.7% 1.6% 2.0%
Dec-2001 3.7% 1.4% 2.0%
Jan-2002 3.7% 1.4% 2.2%
Feb-2002 3.7% 1.5% 2.0%
Mar-2002 3.5% 1.4% 1.9%
Apr-2002 3.8% 1.5% 2.1%
May-2002 3.8% 1.5% 2.1%
Jun-2002 3.7% 1.4% 2.0%
Jul-2002 3.8% 1.5% 2.1%
Aug-2002 3.7% 1.4% 2.0%
Sep-2002 3.7% 1.4% 2.0%
Oct-2002 3.7% 1.4% 2.0%
Nov-2002 3.8% 1.5% 1.9%
Dec-2002 3.8% 1.5% 2.0%
Jan-2003 3.8% 1.5% 1.9%
Feb-2003 3.6% 1.5% 1.9%
Mar-2003 3.4% 1.4% 1.9%
Apr-2003 3.6% 1.6% 1.8%
May-2003 3.5% 1.5% 1.8%
Jun-2003 3.7% 1.6% 1.8%
Jul-2003 3.6% 1.6% 1.8%
Aug-2003 3.6% 1.5% 1.8%
Sep-2003 3.7% 1.5% 1.9%
Oct-2003 3.8% 1.4% 1.9%
Nov-2003 3.6% 1.4% 1.9%
Dec-2003 3.8% 1.5% 1.9%
Jan-2004 3.7% 1.5% 1.9%
Feb-2004 3.6% 1.4% 1.9%
Mar-2004 3.9% 1.4% 2.0%
Apr-2004 3.9% 1.5% 2.0%
May-2004 3.8% 1.4% 1.9%
Jun-2004 3.8% 1.4% 2.0%
Jul-2004 3.7% 1.4% 2.0%
Aug-2004 3.9% 1.5% 2.0%
Sep-2004 3.8% 1.4% 2.0%
Oct-2004 3.9% 1.4% 2.0%
Nov-2004 3.9% 1.5% 2.1%
Dec-2004 4.0% 1.5% 2.1%
Jan-2005 3.9% 1.4% 2.1%
Feb-2005 3.9% 1.4% 2.0%
Mar-2005 3.9% 1.5% 2.1%
Apr-2005 4.0% 1.4% 2.1%
May-2005 3.9% 1.4% 2.1%
Jun-2005 3.9% 1.5% 2.1%
Jul-2005 3.9% 1.4% 2.0%
Aug-2005 4.0% 1.4% 2.2%
Sep-2005 4.0% 1.4% 2.3%
Oct-2005 3.8% 1.3% 2.2%
Nov-2005 3.9% 1.2% 2.2%
Dec-2005 3.7% 1.3% 2.1%
Jan-2006 3.9% 1.3% 2.1%
Feb-2006 3.9% 1.3% 2.2%
Mar-2006 3.9% 1.2% 2.2%
Apr-2006 3.8% 1.3% 2.1%
May-2006 4.0% 1.4% 2.2%
Jun-2006 3.9% 1.2% 2.2%
Jul-2006 3.9% 1.3% 2.2%
Aug-2006 3.8% 1.2% 2.2%
Sep-2006 3.8% 1.3% 2.1%
Oct-2006 3.8% 1.3% 2.1%
Nov-2006 4.0% 1.3% 2.3%
Dec-2006 3.8% 1.3% 2.2%
Jan-2007 3.8% 1.2% 2.2%
Feb-2007 3.8% 1.3% 2.2%
Mar-2007 3.8% 1.3% 2.2%
Apr-2007 3.7% 1.3% 2.1%
May-2007 3.8% 1.3% 2.2%
Jun-2007 3.8% 1.3% 2.0%
Jul-2007 3.7% 1.3% 2.1%
Aug-2007 3.7% 1.3% 2.1%
Sep-2007 3.7% 1.5% 1.9%
Oct-2007 3.8% 1.4% 2.1%
Nov-2007 3.7% 1.4% 2.0%
Dec-2007 3.6% 1.3% 2.0%
Jan-2008 3.5% 1.3% 2.0%
Feb-2008 3.5% 1.4% 2.0%
Mar-2008 3.4% 1.3% 1.9%
Apr-2008 3.5% 1.3% 2.1%
May-2008 3.3% 1.3% 1.9%
Jun-2008 3.5% 1.5% 1.9%
Jul-2008 3.3% 1.4% 1.8%
Aug-2008 3.3% 1.6% 1.7%
Sep-2008 3.1% 1.4% 1.8%
Oct-2008 3.3% 1.6% 1.8%
Nov-2008 2.9% 1.6% 1.5%
Dec-2008 3.2% 1.8% 1.6%
Jan-2009 3.1% 1.9% 1.5%
Feb-2009 3.0% 1.9% 1.5%
Mar-2009 2.8% 1.8% 1.4%
Apr-2009 2.9% 2.0% 1.3%
May-2009 2.8% 1.6% 1.3%
Jun-2009 2.8% 1.6% 1.3%
Jul-2009 2.9% 1.7% 1.3%
Aug-2009 2.9% 1.6% 1.3%
Sep-2009 3.0% 1.6% 1.3%
Oct-2009 2.9% 1.5% 1.3%
Nov-2009 3.1% 1.4% 1.4%
Dec-2009 2.9% 1.5% 1.3%
Jan-2010 3.0% 1.4% 1.3%
Feb-2010 2.9% 1.4% 1.3%
Mar-2010 3.2% 1.4% 1.4%
Apr-2010 3.1% 1.3% 1.5%
May-2010 3.4% 1.3% 1.4%
Jun-2010 3.1% 1.5% 1.5%
Jul-2010 3.2% 1.6% 1.4%
Aug-2010 3.0% 1.4% 1.4%
Sep-2010 3.1% 1.4% 1.4%
Oct-2010 3.1% 1.3% 1.4%
Nov-2010 3.2% 1.4% 1.4%
Dec-2010 3.2% 1.4% 1.5%
Jan-2011 3.0% 1.3% 1.4%
Feb-2011 3.1% 1.3% 1.4%
Mar-2011 3.2% 1.3% 1.5%
Apr-2011 3.2% 1.3% 1.5%
May-2011 3.1% 1.3% 1.5%
Jun-2011 3.3% 1.4% 1.5%
Jul-2011 3.1% 1.3% 1.5%
Aug-2011 3.2% 1.3% 1.5%
Sep-2011 3.3% 1.3% 1.5%
Oct-2011 3.2% 1.3% 1.5%
Nov-2011 3.2% 1.3% 1.5%
Dec-2011 3.2% 1.3% 1.5%
Jan-2012 3.2% 1.2% 1.5%
Feb-2012 3.3% 1.3% 1.6%
Mar-2012 3.3% 1.2% 1.6%
Apr-2012 3.2% 1.4% 1.6%
May-2012 3.3% 1.4% 1.6%
Jun-2012 3.2% 1.3% 1.6%
Jul-2012 3.2% 1.2% 1.6%
Aug-2012 3.3% 1.4% 1.6%
Sep-2012 3.1% 1.3% 1.4%
Oct-2012 3.2% 1.3% 1.5%
Nov-2012 3.3% 1.3% 1.6%
Dec-2012 3.2% 1.2% 1.6%
Jan-2013 3.2% 1.2% 1.7%
Feb-2013 3.4% 1.2% 1.7%
Mar-2013 3.2% 1.3% 1.6%
Apr-2013 3.3% 1.3% 1.6%
May-2013 3.3% 1.3% 1.6%
Jun-2013 3.2% 1.2% 1.6%
Jul-2013 3.3% 1.2% 1.7%
Aug-2013 3.4% 1.2% 1.7%
Sep-2013 3.4% 1.3% 1.7%
Oct-2013 3.3% 1.1% 1.8%
Nov-2013 3.3% 1.1% 1.8%
Dec-2013 3.3% 1.2% 1.8%
Jan-2014 3.3% 1.2% 1.7%
Feb-2014 3.4% 1.2% 1.8%
Mar-2014 3.4% 1.2% 1.8%
Apr-2014 3.5% 1.2% 1.8%
May-2014 3.4% 1.2% 1.8%
June-2014 3.5% 1.2% 1.8%
ChartData Download data

The data below can be saved or copied directly into Excel.

Note: Shaded areas denote recessions. The hires rate is the number of hires during the entire month as a percent of total employment. The layoff rate is the number of layoffs and discharges during the entire month as a percent of total employment. The quits rate is the number of quits during the entire month as a percent of total employment.

Source: EPI analysis of Job Openings and Labor Turnover Survey

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No job openings for more than half of job seekers

The total number of job openings in June was 4.7 million, up from 4.6 million in May. In June, there were 9.5 million job seekers (unemployment data are from the Current Population Survey), meaning that there were 2.0 times as many job seekers as job openings. Put another way: Job seekers so outnumbered job openings that half of job seekers were not going to find a job in June no matter what they did. In a labor market with strong job opportunities, there would be roughly as many job openings as job seekers.

Further, the 9.5 million unemployed workers understates how many job openings will be needed when a robust jobs recovery finally begins, due to the existence of 5.9 million would-be workers who are currently not in the labor market, but who would be if job opportunities were strong. Many of these “missing workers” will become job seekers when we enter a robust jobs recovery, so job openings will be needed for them, too.

Even further, a job opening when the labor market is weak often does not mean the same thing as a job opening when the labor market is strong. There is a wide range of “recruitment intensity” with which a company can deal with a job opening. For example, if a company is trying hard to fill an opening, it may increase the compensation package and/or scale back the required qualifications. Conversely, if it is not trying very hard, it may hike up the required qualifications and/or offer a meager compensation package. Perhaps unsurprisingly, research shows that recruitment intensity is cyclical; it tends to be stronger when the labor market is strong, and weaker when the labor market is weak. This means that when a job opening goes unfilled when the labor market is weak, as it is today, companies may very well be holding out for an overly qualified candidate at a cheap price.

Labor market weakness is not due to workers lacking the right skills

Figure B shows the number of unemployed workers and the number of job openings by industry. This figure is useful for diagnosing what’s behind our sustained high unemployment. If our current elevated unemployment were due to skills shortages or mismatches, we would expect to find some sectors where there are more unemployed workers than job openings, and some where there are more job openings than unemployed workers. What we find, however, is that unemployed workers dramatically outnumber job openings across the board. There are between 1.2 and 7.0 times as many unemployed workers as job openings in every industry. In other words, even in the industry with the most favorable ratio of unemployed workers to job openings (health care and social assistance), there are still nearly 20 percent more unemployed workers than job openings. In no industry does the number of job openings even come close to the number of people looking for work. This demonstrates that the main problem in the labor market is a broad-based lack of demand for workers—not, as is often claimed, available workers lacking the skills needed for the sectors with job openings.

Figure B

Unemployed and job openings, by industry (in thousands)

Industry Unemployed Job openings
Professional and business services 1183.7 760.3
Health care and social assistance 748.0 640.5
Retail trade 1209.5 461.5
Accommodation and food services 1020.8 524.0
Government 759.3 402.2
Finance and insurance 266.1 210.8
Durable goods manufacturing 530.8 169.8
Other services 407.3 139.7
Wholesale trade 174.9 142.3
Transportation, warehousing, and utilities 385.5 150.6
Information 172.4 101.8
Construction 830.4 119.4
Nondurable goods manufacturing 368.2 103.8
Educational services 235.6 69.9
Real estate and rental and leasing 140.3 48.8
Arts, entertainment, and recreation 220.2 74.9
Mining and logging 54.9 25.1
ChartData Download data

The data below can be saved or copied directly into Excel.

Note: Because the data are not seasonally adjusted, these are 12-month averages, July 2013–June 2014.

Source: EPI analysis of data from the Job Openings and Labor Turnover Survey and the Current Population Survey

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