This morning the Bureau of Labor Statistics released an extremely disappointing January report from the Job Openings and Labor Turnover Survey (JOLTS), showing that job openings decreased by 161,000 in January and that revisions to earlier data reveal that there were 142,000 fewer job openings in December than previously reported. Today’s JOLTS report can be better understood in relation to two benchmarks: (1) the number of unemployed workers; and (2) the number of job openings in the recovery following the recession of 2001.
The number of job openings compared to the number of unemployed workers
The total number of job openings in January was 2.8 million. The total number of unemployed workers was 13.9 million (unemployment data are from the Current Population Survey). The ratio of unemployed workers to job openings was thus 5.0-to-1 in January, unchanged from the revised December ratio. January marks 23 months that the “job seeker’s ratio” has been at or above 5-to-1. By comparison, the highest it got in the early 2000s downturn was 2.8-to-1. A job seeker’s ratio of 5-to-1 means that for 4 out of 5 unemployed workers, there simply are no jobs.
The number of job openings now compared to the last recovery
The JOLTS survey began in December 2000, so the only other recession captured by these data is that of the early 2000s. After the early 2000s recession, job growth was very slow. The economy shed jobs—1.1 million of them—for 21 months after the recession officially ended. Yet the current recovery has generated far fewer job openings than even the extremely weak recovery of the early 2000s. In the first 19 months of that recovery (December 2001 to June 2003), the cumulative number of job openings in the economy was 65.9 million. In the first 19 months of the current recovery (July 2009 to January 2011), the cumulative number of job openings in the economy was 49.5 million, 25% lower. In other words, our labor market has a significant shortfall of new job openings even when measured against the exceptionally weak recovery of the early 2000s. (For more information on the shortfall of job openings in the current recovery, see Reasons for Skepticism About Structural Unemployment.) These numbers underscore the fact that cuts in federal spending are extremely premature. With the job seekers ratio at or above 5-to-1 for nearly two straight years, we should instead be having discussions of substantial additional stimulus spending.
—Research assistance by Kathryn Edwards and Nick Finio.