the September 7th Job Openings and Labor Turnover Survey (JOLTS) report

The Bureau of Labor Statistics of the Labor Department released its latest JOLTS report on Wednesday.

The main results:

–nationwide job openings are now at 5.9 million, the highest figure in the 16 year history of the report.  This is substantially above the 4.5 million level of 2006-07.

–the rate of new hires has been flat for about two years at just over 5 million monthly.  While this is 5% – 10% below the rate of 2006-07, the very high number of job openings would have been consistent with an unemployment rate of 3% ten years ago.  This seems to me to be a point in favor of the idea that the main impediment to filling jobs is finding workers with needed skills.

–3 million workers are voluntarily leaving their jobs monthly.  This is a sign they’re confident of finding employment again without much difficulty.  That’s back to the pre-recession levels of 2006, and almost double the recession lows.

All of this argues that the US is at or near full employment.  On the other hand, however, there’s little sign of the upward pressure on wages that this situation would have produced in the past.


Whatever the reason for slow-rising wages, it seems to me there’s no reason in the employment figures for the Fed to maintain anything near the current emergency-room-low level of short-term interest rates.



last week’s jobs numbers

There were actually two sets of figures published by the Bureau of Labor Statistics.  The Employment Situation report, which is normally released on the first Friday of the month but which was delayed by the government shutdown, and the JOLTS (Job Openings and Labor Turnover Summary) report for August.

The Employment Situation. released on October 22nd, showed the job market as essentially unchanged in September from prior months.  The initial estimate for September was a gain of 148,000 jobs, a bit less than the consensus forecast of domestic economists.  But the survey is accurate only to +/- 100,000.  And my impression is that economists’ estimates are just stabs in the dark, centered around the trend of recent months’ results.  So unchanged is the best characterization, in my view.

Revisions were benign, as well.  July was revised down by 15,000 to +89,000 positions;  August was revised up by 24,000 to 193,000.  The net change, +9,000 jobs, is statistically insignificant.

The JOLTS report for August, published on the 24th, and which I pay somewhat less attention to, wasn’t earthshaking, either.  The economy had 3.9 million unfilled jobs at the end of that month.  That’s about 100,000 more than in July and about a quarter million more than in August 2012.  The fact that more employers are looking to hire–all in the private sector, not government–is a good thing.

There is some controversy surrounding the JOLTS figures, however.  Why is the unemployment rate so high, at 7.2% of the workforce, when there are almost four million unfilled jobs?

One camp thinks factors like mismatches between, say, the location of the jobs and that of the unemployed is a big reason, but that four million is an ok number in a healing economy.  The other, which includes me, thinks that the JOLTS figures are evidence that a good chunk of current unemployment is structural rather than cyclical–caused by a fundamental mismatch between worker skills and job requirements.  If so, the only way the JOLTS number will come down is through retraining programs and changes in education policy from Washington.  Fat chance of either happening.  But if camp #2 is right, current indifference by government risks creating a permanent underclass of chronically unemployed that will be a big long-term problem.

The bottom line:  neither report has major short-term Wall Street implications.