Anyone Who Doesn’t Think the Job Market is Improving…

September 11th, 2012 at 12:01 pm

…needs to explain this clear trend.  It’s the “musical chairs” graph from the BLS showing the number of unemployed persons per job opening.

A few years ago, it peaked just below seven; now it’s around 3.5.   That’s still well above pre-recession levels but like I always say–folksy economist that I am: you can’t get where you need to be if you ain’t movin’ in the right direction.

Moving too slowly and haltingly?  Absolutely.  But moving nevertheless.

If I had time, I’d figure out where that line would be if we’d implemented that American Jobs Act and added another bunch of jobs.

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13 comments in reply to "Anyone Who Doesn’t Think the Job Market is Improving…"

  1. Mathew Binkley says:

    I’m admittedly only an amateur economist, but wouldn’t Total Hires and the U4 rate (unemployed + discouraged) give a better assessment?

    Job openings are nice, but you don’t actually get a paycheck until it’s a hire. And U4 factors in the ones who have given up looking for a job.

    From that perspective, the situation has still gotten much better, the slope is flattening but the derivative hasn’t changed signs yet. I would think that better represents how the jobs market “feels” to the unemployed.

  2. Lars Olsson says:

    Maybe this is just me not understanding the way these data are measured, but wouldn’t one possible explanation for that (other than: things are improving) be that a larger number of these people are no longer looking for work, thus are no longer counted as unemployed by the BLS? That’s why headline unemployment declined 0.2% last Friday, isn’t it? Why wouldn’t that be possible here, too?

  3. Christopher C. says:

    Since the unemployment number is influenced by people who would like a job but are not actively searching, could you recast this as “working age population vs. job openings”? I suspect it would look similar, but not necessarily so dramatic.

    (I actually tried to do this using the FRED plug-in for Excel, which is fun! I got the Job Openings : Total Nonfarm, data set JTSJOL, but could only get Working age population, data set USAWFPNA, with annual numbers instead of monthly…)

  4. Fred Donaldson says:

    Many of the so-called jobs are minimum wage monstrosities that won’t feed a family or pay for health insurance. You are better off on “welfare” and benefits like Medicaid than trying to raise a family with $6 an hour takehome, and buying health insurance for a family at $900 a month, which would be about all the money you earn.

    Some people are deliberately divorcing in order that one spouse is eligible for safety net benefits for their children. A sad world without good jobs, a “Brave New World” without hope for many.

    We are also seeing many folks working off the books, many retiring early and many getting 28 hours a week, which one big company calls fulltime.

  5. Michael says:

    This feels like slow despair, not recovery.

  6. Virgil Bierschwale says:

    I hope you are correct, but I have to ask one question as devils advocate.

    Have you, or anybody you know even been counted if they are unemployed, or underemployed?

    For the most part, I have been unable to find steady work in the software arena even though that is one of the “hot” industries and I’ve heard from many others in the same boat.

    I have never once been counted, and since my unemployment expired in May I’m betting that I am not counted in any way, shape, or form.

    Keep America At Work

    • Candi151 says:

      Funny, but my son is an IT Networks Admin. and he’s gotten calls from 4 companies wanting to hire him. He’s actually working right now, but accepted a job making twice what’s he’s currently making which is a very good salary, with excellent benefits.

  7. Bert Merder says:

    You’re going to hate this… anecdotal evidence. But I raise the point mostly (hopefully) to get you to put your expertise to work on it.

    The assumption is that there are fewer unemployed, yet job openings are constant (or increasing). And there are a lot of job openings, and not just minimum wage jobs, lots of jobs. However, I’m not convinced that the companies posting these jobs are actually hiring. I’ve taken to using the pithy phrase that “companies are pretending to be hiring.”

    Again, anecdotal. Maybe I’m totally wrong, but companies that are hiring don’t take months and months to contact qualified applicants, then take months to say you’re not hired.

  8. Chris G says:

    The thing that bugs me about that chart is that the EPR has been flat for quite awhile now. The EPR was rising AND unemployed persons per opening were falling when I might be convinced things are getting better.

    The other thing that gets me is this:
    What fraction of new opportunities pay a middle-class wage or better and what fraction are scut work? Are we replacing decent-paying jobs with scut work?

    • Chris G says:

      Please forgive my typos. What I meant to write was, “If the EPR was rising…” and “… then I might be convinced…”

      (And “EPR” = “employment-to-population ratio”)

  9. NRG says:

    I’ll believe there is a real jobs recovery when job growth exceeds population growth rather than trailing it. Happy talk of moving in reverse less slowly has lost its appeal as the jobs deficit has continued to grow for years. Can we threaten to shut down Congress if we don’t close that deficit, the one that actually matters, please?

    I also second the point made above about McJobs — they are sometimes worse than nothing.

  10. save_the_rustbelt says:

    Lots of $10 an hour jobs – wow.