Job Market Stuck in First Gear

The big drop in the unemployment rate (and accompanying skepticism) dominated the headlines, but the real story of Friday’s jobs report may have been the revisions to payroll figures from July and August. What had at one point looked like a summer slowdown in hiring now looks to have been a continuation of the slow, grinding jobs growth that has been a hallmark of the recovery. New data on Wednesday reinforces that story. Hiring picked up in August, but so did layoffs, according to the Labor Department’s latest survey of job openings and turnover. The survey, known as JOLTS, doesn’t get the buzz of the main jobs report, mostly because it lags a month further behind. But because it gives a much more detailed look at how people are moving in and out of jobs, the survey can provide a valuable window into the inner workings of the labor market. This month’s report shows a job market that’s still stuck in first gear. Employers hired 4.4 million workers in August, the most since May. But they laid off 1.8 million workers, too, also the most since May. Over the past year, employers have hired an average of around 150,000 more workers per month than they’ve lost (whether through layoffs or through quits, retirements or other factors), consistent with slow growth.Two more forward-looking indicators suggest both businesses and individuals remain nervous about the economy. Employers posted slightly fewer job openings in August than in July, the second consecutive monthly drop. But job openings are still running ahead of last year’s pace and are up substantially from earlier in the recovery. Similarly, slightly fewer workers left their jobs voluntarily in August, but quits — which can be a sign of confidence in the job market — are up from last year. Job seekers face long but improving odds. There were 3.5 unemployed workers for every job opening in August, a hair better than in July and far better than the ratio of more than six-to-one during the recession. Before the recession, however, there were less than two unemployed workers for every available job. October 10, 2012

Ben Casselman

http://blogs.wsj.com/economics/2012/10/10/job-market-stuck-in-first-gear/