The May Job Openings and Labor Turnover Survey (JOLTS), released today by the Bureau of Labor Statistics, provides evidence that the recovery continues to stagnate. While job openings in May increased by 195,000, unemployment in May increased by 220,000 (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—fell slightly (by one-tenth), to 3.5-to-1.
The ratio has been slowly but steadily improving since reaching its peak of 6.7-to-1 in summer 2009. 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 increase in job openings, hires also increased in May, by 148,000. Looking at the data over time, hires are on a slow upward climb, up 18.5 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 16.0 percent below its 2007 average.
Voluntary quits increased by only 6,000 in May. If the economy were healthier, we would expect a larger number of voluntary quits, which would signal that workers are more confident about outside job opportunities. Voluntary quits are also on a general upward climb, having increased 21.1 percent since June 2009. But they too have a long way to go; voluntary quits are still 26.5 percent below their 2007 average.
Layoffs also increased in May, by 142,000. Despite May’s increase, the number of layoffs remains at a roughly “normal” level; however, for the first time this year, it exceeded its 2007 average.
With research assistance from Nicholas Finio and Natalie Sabadish