BLS Releases Latest Job Openings Data, Number Of Unemployed People Per Open Spot Increases In February To 5.5

Tyler Durden's picture

The number of unemployed persons per job opening has started to increase again, hitting 5.5 in February, as just disclosed by the BLS' most recent Job Openings and Labor Turnover Survey. In February, the total number of job openings declined from 2.85 million to 2.72 million sequentially. The job openings rate was little changed over the month at 2.1 percent. The hires rate (3.1 percent) and the separations rate (3.1 percent) were also little changed in February. Most importantly, there is no improvement in the rate of Hiring, which declined from 4.09 million to 3.96 million. Attached are the main charts of relevance along with BLS commentary.

1. Total number of unemployed persons per job opening.

  • Combining the unemployment level and job openings level produces a ratio between the 2 series that can serve as an indication of how the number of unemployed persons per job opening changes over time.
  • When the Job Openings and Labor Turnover Survey (JOLTS) series began in December 2000, the ratio was just over 1 unemployed person per job opening. The ratio rose during and after the recession that began in March 2001, rising to a maximum of nearly 3 unemployed persons per open job in September 2003. After September, the ratio drifted steadily downward to 1.4 in March 2007.
  • When the recession began in December 2007, there were 1.8 unemployed persons per job opening. The ratio rose to a high of 6.2 unemployed persons per open job, twice the highest ratio seen since the JOLTS series began.
  • In February 2010, there were 5.5 unemployed persons per job opening.

2. Job opening and employment

  • The number of job openings peaked at 4.8 million in March 2007 then began falling. Employment peaked later, at 138.0 million in December 2007.
  • The number of job openings had already declined to 4.4 million when the employment downturn began at the official start of the recession in December 2007.
  • Job openings fell to a low of 2.3 million in July 2009.
  • In February 2010, there were 2.7 million job openings in the United States and employment was 129.6 million.

3. Hires, total separations and employment

  • The number of hires peaked at 5.6 million in January 2005 then remained essentially stable until November 2006 when hires began to decline. The number of hires had declined to 5.0 million by the official start of the recession in December 2007.
  • Hires fell to a low point of 3.9 million in June 2009.
  • Separations also began to decline before the recession, and in December 2007 when the recession began there were 5.0 million separations.
  • Separations have trended downward overall since the start of the recession in December 2007.
  • Employment continued to rise during the period immediately preceding the recession, because hires, although falling, were still greater than separations, which were also falling.
  • Employment peaked at 138.0 million in December 2007, the beginning of the recession.
  • In February 2010, there were 4.0 million hires and 4.0 million separations in the United States.

Quits and layoffs and discharges

  • The number of quits has exceeded the number of layoffs and discharges for most of the JOLTS series since December 2000 when the series began. The number of layoffs and discharges began to rise in February 2006 and the number of quits began to decline in December 2006. By November 2008, layoffs and discharges outnumbered quits.
  • From November 2008 onward, the number of quits continued to fall, reaching a low point of 1.7 million in September 2009. The number of layoffs and discharges rose to a peak of 2.6 million in January 2009.
  • In February 2010, with 1,848,000 quits and 1,822,000 layoffs and discharges, quits again outnumbered layoffs and discharges for the first time since November 2008.

5. Our, and everyone else's, favorite: The Beveridge Curve - Job Openings vs. Unemployment Rate

  • The above graph plots the JOLTS job openings rate against the CPS unemployment rate. This graphical representation of the relationship between the unemployment rate and the vacancy rate is known as the Beveridge Curve, named after the British economist William Henry Beveridge (1879-1963). The economy’s position on the downward sloping Beveridge Curve reflects the state of the business cycle.
  • During an expansion, the unemployment rate is low and the vacancy rate is high. During a contraction, the unemployment rate is high and the vacancy rate is low. The position of the curve is determined by the efficiency of the labor market. For example, a greater mismatch between available jobs and the unemployed in terms of skills or location would cause the curve to shift outward.
  • Since the start of the recession in December 2007, the point on the curve has moved lower and further to the right as the job openings rate declined and the unemployment rate rose.
  • In February 2010, the point on the curve moved slightly down as the job openings rate fell from 2.2 percent to 2.1 percent and the unemployment rate remained the same.