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The Driver Of Employment "Gains" - Job Separations At Lowest In A Decade

Tyler Durden's picture




 

While the fact that over the past few quarters private payrolls have increased has been widely touted by the administration as an indication that the economic recovery has taken root (even if recent NFP numbers have been decidedly below consensus), the fact is that spin of NFP data looks solely at one part of the monthly change in payrolls data: the new payrolls one. Alas, as the 12 Month rolling average chart straight out of JOLTs below demonstrates a just as important, and far less spin-friendly, part of the equation is jobs "separations." The simple math is that the monthly change in payrolls, establishment or household survey aside, is simply equal to new hires less total separations. And it is the latter that is now at decade lows. Said otherwise, payrolls are only up because of the rate of firings is the lowest in the past ten years now that companies have virtually nobody left to fire. This also means that as far as wage negotiations are concerned, workers will have absolutely no leverage. Which can be seen on the second chart. While having picked up modestly in the past several months, the percentage of people voluntarily quitting their job is nearly half of where it has been during the past decade. It also appears to be once again plateauing, now that the jobless recession has double dipped again, and "New Jobs" postings are once again on the wane.

The critical point is the reported BLS NON-FARM PAYROLLS can be driven by one of two things, either A PICKUP IN HIRING OR A SLOWDOWN IN SEPARATIONS.........While the politicians now point to the PRIVATE SECTOR JOB GROWTH, they fail to point out its because of a significant slowdown in SEPARATIONS which is not the same economically as a pickup in NEW HIRING (which is currently at a decade low).

In the 2001, the level of NEW HIRINGS was running as high as 5.8 mm per month. We are currently sitting below 4.0 mm hirings per month and that doesn't account for the required growth in jobs due to demographics.

The bottom line, the "employment gains" have not been due to increased hiring, but due to ever more desperate people no longer daring to leave whatever job security they may have (and willing to take pay cuts as a condition of keeping said jobs).

New Hires and Total Separations:

Rate of people quitting their jobs:

Courtesy of John Poehling

 

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Sat, 06/25/2011 - 22:44 | 1402042 gsiencze
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?

Sun, 06/26/2011 - 07:17 | 1402581 NoBull1994
NoBull1994's picture

Don't forget birth-death adjustments

Sat, 06/25/2011 - 23:26 | 1402134 Newsboy
Newsboy's picture

I've been quitting one or two jobs a year, myself, so it's worse than it looks.

Sat, 06/25/2011 - 23:38 | 1402174 Miss anthrope
Miss anthrope's picture

I just had a meeting last week with executive team and pointed out that we still had 2 mid-managers that could be let go that are really essentially dead weight since everyone who still has a job knows they have to contribute 100% to keep it.... the producers that is.  Of course, i'm in the private sector...... which is a completely different experience than the government/public sector employment.......... both now and in decades past.  The name of the game in government sector is to LOOK busy at all times.  It doesn't matter what you are actually doing as long as you LOOK busy.

 

 

Sat, 06/25/2011 - 23:51 | 1402199 Yen Cross
Yen Cross's picture

 Nice work Miss A. Yen.

Sun, 06/26/2011 - 08:45 | 1402628 spanish inquisition
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I used to be in a large private company and people were amazed at how I could predict layoffs. When the senior VP's who you never heard from or saw send out emails they are leading a major initiative / project to reorganize / improve a process, you have 1-2 months before layoffs. They all need to look busy and getting a heads up, lift theirs off the block first.

Sun, 06/26/2011 - 16:20 | 1403492 Pegasus Muse
Pegasus Muse's picture

The name of the game in government sector is to LOOK busy at all times.  It doesn't matter what you are actually doing as long as you LOOK busy.

Tell that to that young E-2 trooper on patrol right now in some god foresaken backwater of Waziristan working for the grand sum of $1645/month (before taxes), hoping he doesn't fuck up and step on a Pashtun IED rendering his legs bloody stumps, or worse.  Government work is definitely a different line of work --- one that most whiny-ass, put-upon, look-how-bad-I-have-it private sector cubicle monkies are not so keen to volunteer for and experience first hand.  Look busy my ass.   

Sun, 06/26/2011 - 17:48 | 1403645 topcallingtroll
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for every E-2 in Afghanistan there have to be thousands of useless government drones looking busy.  I used to be one of them 12 years ago.

You sound like just another whiny ass, put-upon, look how bad I have it veteran on disability.  You got out on a mental disability?

Or maybe you have one of those government jobs reserved for veterans where you don't have to work very much and have six weeks off a year?

Mon, 06/27/2011 - 09:47 | 1405089 Pegasus Muse
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A general characterization that government employees work to "look busy" (don't have real productive jobs) is just as false as suggesting your personal work experience and work ethic while employed as a "government drone" applies universally. 

My impression from working both in government and in the private sector is that the private sector, even in this down economy, has its fair share of "looking busy" types.  They are easy to spot.  They're the guys who spend their most their office hours fucking off on blogs bitching about all those "lazy ass" government employees.

I junked you.  You earned it.            

Sat, 06/25/2011 - 23:43 | 1402180 Miss anthrope
Miss anthrope's picture

I have just one question.  When is the dollar going to default?  If anyone out there knows one of the elite bankers who actually has the answer could you please share?????

 

Pretty please?

Sat, 06/25/2011 - 23:46 | 1402197 Yen Cross
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 Did anyone catch that { arrow} ?

Sun, 06/26/2011 - 00:18 | 1402258 RockyRacoon
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Nice to see what was suspected presented graphically for better understanding.

Sun, 06/26/2011 - 00:26 | 1402284 Ben Fleeced
Ben Fleeced's picture

Now we have the definition of "jobs saved".

Sun, 06/26/2011 - 01:50 | 1402413 HungrySeagull
HungrySeagull's picture

They are a bunch of wussies. They have gotten themselves so far into the Chinese finger trap/tube thing that they cannot get out. So it hurts too much to even try.

You know what happens to a shelter at 6:30 am in the morning? Everyone out. Late sleepers are banned from returning that night or ever. Why? To get work.

Why bother with one worker? Start by paying ten workers 10 dollars for the group and let them fight over the money. They will force out the weak and the strong will be your right hand in times of trouble.

 

WTF you say. I say that I have been made crew leader with 12 or so people. There are 6 who slack off and have to be chased/herded into the job, there are 3 who are fighting FOR YOUR job and the rest are ... adequate. Neither outstanding neither bad. Just enough to keep the paycheck train going another week without getting noticed.

Sort of like a recruit enduring Boot without being spotted by the DI. Not a chance.

If done right, you can sell out and retire with a crew to take care of your menial house tasks while you lean on the lap top thinking of the next big move.

Sun, 06/26/2011 - 06:08 | 1402549 richard in norway
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Larry? is that you, you squid loving psychopath

Sun, 06/26/2011 - 08:59 | 1402641 css1971
css1971's picture

So, your policy is to hire dumb people?

You'll go far.

 

Sun, 06/26/2011 - 13:40 | 1403190 HungrySeagull
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My Boss has literally done just that. A group to Open a door, close a door. Open a door, close the door so that the customers stay warm in the winter blast.

The group we had hardly spoke english and after a dog-pony show they understood. Open door, shut door.

I was ashamed because these folks did it for the equivelant of half the charges to the company.

Sun, 06/26/2011 - 06:14 | 1402553 overmedicatedun...
overmedicatedundersexed's picture

.

Sun, 06/26/2011 - 09:17 | 1402665 rsnoble
rsnoble's picture

This is all bad news for someone like my because I even had a hard time keeping a job when times were good due to the inability to suck cock and kiss ass.  The majority of the people left working probably have superior deep throat skills.

Mon, 06/27/2011 - 06:23 | 1404884 Prometheus418
Prometheus418's picture

The trick, when one does not have the ability to brown nose, is to own your job and ratchet up your personal leverage so that it will hurt them more than it hurts you if you leave.

Lots of ways to do this, but you have to do real work.

Sun, 06/26/2011 - 09:34 | 1402681 Absinthe Minded
Absinthe Minded's picture

I guess this is the new ABnormal.

Sun, 06/26/2011 - 09:36 | 1402683 Sambo
Sambo's picture

These boom - bust cycles are far too disruptive for people, businesses, for everyone except the get-rich-quick Wall St gamblers. For these gamblers, the cycles are an opportunity to make money, whether you are at the peak or at the bottom.

The cost of disruption - unemployment, greater debt, stress at work, deteriorating health (I wonder by how much the Monday heart attacks have increased since 2007)....it is way too much for Greenspank and the Bernank to calculate. These experimental economists need to be put on the next space shuttle mission to Mars..

Sun, 06/26/2011 - 09:42 | 1402694 oldmanagain
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This article is like Columbus discovering the Americas and thinking he invented them.  

We all know that administration after administration have redefined inflation, unemployment, etc. to look good as a headline but bury it  for those who do know math(ie non-Austrians) to discover.

Sun, 06/26/2011 - 09:47 | 1402698 Ying-Yang
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I don't blame illegals or H-1B's for wanting to better their lives by looking for work in the US.

Businesses do this to suppress wage growth which is a flawed strategy. Out sourcing and bottom filling destroys wages and lowers standard of living.

A few years ago I hired software engineers at $100-150 per hour. Now I hire engineers willing to work for $15-20 per hour.

Bid a $1.5 mil job looking to hire all US engineers but owners made me hire Indians at a spread average of $25 per hour.

If owners and corporations really cared about the standard of living of US citizens they would stop this destruction.

Globalization is great for multinationals and destruction for what used to be the US. If we cared about our fellow employees and neighbors we would want them to be successful.

With 50 years of working experience I can truthfully say I have never seen a worse employment situation. Employee leverage may never ever return. Never ever?

Yes never....

Be nice to your neighbor, you may need his help one day.

Peace

Sun, 06/26/2011 - 10:01 | 1402717 oldmanagain
oldmanagain's picture

Excellent articulation of the basic problem.(Ying Yang) Lower wages, exporting jobs, basic inflation(even the Feds hallowed 2%) are not joyous times for the real(mathematical) economic health of nation even if it does make for even richer, rich.  When less and less players can not pass "go" in the monopoly progressions, aggregate demand withers.  

The ultimate insult, intellectual and actual, is to now blame the unemployed.  Fire the teachers, close those math orientated schools, etc. 

Sun, 06/26/2011 - 11:08 | 1402795 Ying-Yang
Ying-Yang's picture

Yes Oldmanagain...

I challenge the status quo of Walmart part time without benefits. What US corporations today care about employees in the US? If corporations don't pay a living wage, provide true cost of living increases and healthcare participation, do they really care? They say "at least they have a job". Damn... how does one ever save or maintain health?

Management and stockholders increase their wealth at the expense of their own employees. If you don't feed your dog he dies or EATS you.

 

Sun, 06/26/2011 - 17:42 | 1403643 topcallingtroll
topcallingtroll's picture

As low as dividends are right now it certainly can't be company owners (stockholders) making any money.  Where the fuck is it going?  As a fractional owner of several companies why am I not getting my fair share?

Sun, 06/26/2011 - 10:51 | 1402837 sethstorm
sethstorm's picture

You're part of the problem for encouraging it, or at best simply following orders.

 

What would it take to return leverage to the employee or job seeker?  I'm not sure that there are many voluntary ways (if any) that will allow that to happen.

 

 

 

Sun, 06/26/2011 - 11:07 | 1402876 Ying-Yang
Ying-Yang's picture

Yes I was the problem. My point exactly. I made the case for hiring US and was shot down. Ironically we lost the bid to an Indian company.

Owners need to rethink the logic. Don't pay workers in the US then the US goes into the toilet.

Sun, 06/26/2011 - 12:14 | 1403025 sethstorm
sethstorm's picture

At least you were (as much as can be stated here) honest.

The question now becomes, how can there be a voluntary means of getting business to rethink? 

Sun, 06/26/2011 - 10:22 | 1402758 Heroic Couplet
Heroic Couplet's picture

We have to get to the point in this country where we confront Republicans about their tax cut ideology, call them liars, to their face, if tax cuts don't work to create jobs, vote them out, and keep them out.

If you're unemployed, you should be conducting your job search from your local Republican's office, State and Congressional elected official. They should welcome you with open arms. If they show the least hesitancy, get out your video cam, start recording, and post the results to Youtube. Invite the Republican staff to call Faux News. No doubt they won't want to but the confrontation should be filmed and should be hilarious.

Sun, 06/26/2011 - 10:53 | 1402854 Ying-Yang
Ying-Yang's picture

I honestly think we are way past voting red or blue. I have called, wrote and emailed my senators and representative too many times over the last 3 years.

Informing them of my wishes and receiving administrative replies that are nothing more than campaign slogans.

I have attended meetings and asked hard questions with only scripted replies.

Look at the debt issue... do you have any doubt that the Dems and Reps will NOT extend the debt limit. Of course they will. We are watching a political reality show where nothing is what it seems.

Negotiations take place behind closed doors and Eric Cantor walks out. All staged and measured to provide drama and to provoke team spirit. Rah rah siss booom bah.

I sadly believe the after TPTB have plundered most of the wealth, they will demand austerity taxpayers won't like. The awakening of the MOB happens then.

Starving the beast would turn the tide but human nature is to extend and pretend until you can't.

Sun, 06/26/2011 - 13:32 | 1403183 jomama
jomama's picture

lol, someone still buying into that right vs. left false dichotomy...

Sun, 06/26/2011 - 10:40 | 1402819 Hulk
Hulk's picture

payroll increases were due only to a birth-death algo gone mad...

Sun, 06/26/2011 - 15:18 | 1403408 r101958
r101958's picture

Hulk and Jomama...exactly correct. I posted the following before last years election.....seems like I should post it again:

"Current politics is best represented by a two headed dragon. Politicians pay lip service to opposing ideologies but both the Republican and Democratic parties are part of the same big government dragon body. The body is moving in one direction; bigger and more powerful government. More control over the electorate. Having the two parties serves a greater purpose though....it divides the populace (sheeple?) into two camps that are always at each others' throat. I think this tactic is called divide and conquer. Until we wake up and get away from the 'Repubs this....' or 'Dems that....' blame game then we will be slowly boiled...just like the frog in the frying pan...all while the dragon stands by watching and laughing."

And .....the sheep continue bleeting.

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