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Chart Of The Day - The Hiringless Recovery

Tyler Durden's picture




 

Many have opined that while the unemployment rate may be 6.6%, down from a peak of 10% three and a half year ago, the so-called recovery sure doesn't feel like one: after all so many Americans are still struggling to find work and as so many complain, employers are simply not hiring.

But how is that possible if the establishment survey tells us that the 12 month cumulative change in payrolls is now back to its ~2 million pre-recession average? Well, as it turns out, all those who complain about lack of hiring, are absolutely correct.

As the chart below shows, using the most recent JOLTS data, while historically the hires and cumulative job change numbers have tracked each other almost perfectly, in the current environment, hiring is far below where it should be if one were to believe the headline job numbers.

As even Goldman notes, "the hiring rate fell one-tenth to 3.2% and remains notably depressed relative to pre-recession levels" and Convergex' Nick Colas adds "employers added fewer new hires than in any month since June. A 2.0% dip in hiring was just the second monthly decline in the latter half of 2013, as 92,000 fewer workers started new jobs during December compared with the prior month."

What does this mean?

Well, as SMRA summarizes, the uptrend in the net turnover numbers or the nonfarm payroll since the onset of recovery was based largely on to a decline in layoffs and other separations, as oppose to robust hirings.

In other words, the US jobs "recovery" is based on less firings (and quits) than actual hirings. And remember: a business is growing when it is hiring, not when it is afraid to fire for lack of finding a qualified replacement out of a systematically impaired labor force, in which millions of people have been without a job for so long they have forgotten the bulk of their work skills, until they simply stop looking altogether and drop out of the labor force entirely, and certainly not when an employer is terrified to quit for lack of finding a better job.

Which, incidentally, also explains the record number of Americans out of the labor force: it has everything to do with the fake "recovery" in which companies refuse to hire, and virtually nothing to do with the demographics of the US population, as we (and the BLS once upon a time) have shown time after time.

And finally, for those who still harbor some hope that the last year's job prints were weather impacted, and may have been dragged lower due to cold weather in the survey week, here is a shock: the JOLTS net turnover chart which measures hires less separations, and traditionally matches the Establishment's survey as close to tick for tick as possible. Why is the net turnover number important? Because the Jolts data takes a snapshot of hires and separations for the full month, in contrast to the payroll numbers, which compares payroll counts for the pay period that includes the 12th in the month. In other words, if the weather was to blame for the atrocious December jobs print, the chart below would not show a dip. Instead net turnover was a meager 67,000 in the final month of 2013, following a 6-month string of job growth in the 150,000 to 250,000 range. It was the worst month for employment since the economy added 64,000 to payrolls in August 2012.


So much for the weather - again.

 

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Wed, 02/12/2014 - 15:00 | 4428867 Dr. Engali
Dr. Engali's picture

All you have to do is look around you and see the businesses closing their doors, the infrastructure of the city going to shit, more scooters driving around, and more people scavenging through the dumpsters to realize that the official numbers are full of shit. Fuck the numbers, take a look around and you can see the country is falling apart. 

Wed, 02/12/2014 - 15:00 | 4428889 Grande Tetons
Grande Tetons's picture
Bang on, Doc.  I have clients in the US, Canada and Mexico...and almost all of them are crying the blues about how shitty things are. Purely anecdotal...but it gives creedence to your thesis. 
Wed, 02/12/2014 - 15:12 | 4428934 NotApplicable
NotApplicable's picture

Something must be wrong with me, as I cannot fathom how less layoffs and declining hires end up creating higher payroll numbers.

Damn you sobriety! Damn you to Hell!

The only question left? Should I go with crack or meth?

Wed, 02/12/2014 - 15:16 | 4428941 twh99
twh99's picture

You picked the wrong decade to stop drinking.

Wed, 02/12/2014 - 15:40 | 4429099 max2205
max2205's picture

Duh to the article

Wed, 02/12/2014 - 15:46 | 4429133 Occident Mortal
Occident Mortal's picture

Where I come from, if you can't get a job you start a business.

Wed, 02/12/2014 - 16:49 | 4429454 wallstreetapost...
wallstreetaposteriori's picture

or grow weed.  Pot stocks 2014

Wed, 02/12/2014 - 20:44 | 4430454 Gankfest
Gankfest's picture

It's a shit storm. *Giggles

Wed, 02/12/2014 - 17:49 | 4429790 Jumbotron
Jumbotron's picture

So....Occident Mortal....how's that working out where you come from?

The reason one can't get a job where you come from is that business does not need to hire due to lower or no business.  So...you're going to start a business where there is declining business.  Of course....you might say...you have to start the RIGHT business.  And you would be correct.  However, even if you do find that niche will you make enough money in a macro-economic world of declining wages and lower savings rate to pay for your increased housing cost, your increased transportation costs, your increased health-care costs, your increased taxation both personal and business, your increased insurance costs, your increased utility costs, your increased raw materials costs if you are engaging in some sort of value added production?

Pithy comments from the Rush Limbaugh school of agitprop is NOT going to get ANYONE a job ......."where you come from"

Wed, 02/12/2014 - 15:18 | 4428962 I Am Not a Copp...
I Am Not a Copper Top's picture

Glue.  Or Bath Salts.

Wed, 02/12/2014 - 15:29 | 4429042 Occams_Chainsaw
Occams_Chainsaw's picture

Go with E-Meth.  It's OK...it's electronic.

 

http://www.youtube.com/watch?v=7DwIbcwK47w

Wed, 02/12/2014 - 15:04 | 4428891 Winston Churchill
Winston Churchill's picture

Yep,

Starting to look like a banana republic as well.

Wed, 02/12/2014 - 15:06 | 4428908 Remnant_Army
Remnant_Army's picture

Look and see.  

Hungry for truth, read here:

http://www.thewarningsecondcoming.com/messages/latest-messages/

Wed, 02/12/2014 - 15:05 | 4428913 TheRideNeverEnds
TheRideNeverEnds's picture

long bindles?

Wed, 02/12/2014 - 15:55 | 4429171 Dead Man Walking
Dead Man Walking's picture

I agree, but the problem is nobody sees it. suburban usa is quietly asleep.

Wed, 02/12/2014 - 17:52 | 4429795 olenumbersix
olenumbersix's picture

We live in orlando and its bad but it gets worse as you get farther away for the theme parks, looks like about 12 to 15% of the store fronts are empty with lease signs everywhere but when you get out into hollyhill and daytona its apocalysptic, sad, and scarey.

Wed, 02/12/2014 - 18:54 | 4430040 Westcoastliberal
Westcoastliberal's picture

Didn't I read that "Arabian Knights" in Kissimmee just closed?  That knockoff of "Medieval Times" has been around for at least 20 years.

Wed, 02/12/2014 - 15:06 | 4428904 duo
duo's picture

I found in a census .pdf that there were 59 million housholds headed by a FULL TIME WORKER in 1965 (Great Society anyone?).  Now we have 48 million on food stamps alone.  It's as if the whole population of Germany or France is on the dole or a Wal-mart slave.

Wed, 02/12/2014 - 15:04 | 4428906 syntaxterror
syntaxterror's picture

Put up life-size posters, statues, billboards, and monuments to Dear Leader. How many jobs would that create?

Wed, 02/12/2014 - 15:09 | 4428920 mayhem_korner
mayhem_korner's picture

 

 

You left out cadavers.

[Weekend at Bernie's]

Wed, 02/12/2014 - 15:08 | 4428917 mayhem_korner
mayhem_korner's picture

 

 

Yes, but Barry fixed (f***d?) the hiring problem by raising the minimum wage, no?

Wed, 02/12/2014 - 15:12 | 4428933 denverdolomte
denverdolomte's picture

I honestly believe nothing has changed and why these bankers / politicians are still in power because no one knows what to do. I would be willing to bet that more people than we all imagine are irrate at the state of the country. Unfortunately we are a nation of followers and not leaders. It's time to lead by example not by ideology. 

 

**I'm pointing the finger at myself to, as I can talk and know as much as I want, but its worthless until I do something about it.

Wed, 02/12/2014 - 15:45 | 4429121 PeeramidIdeologies
PeeramidIdeologies's picture

They say when you point a finger there's three more pointing back at you.... Try it, it's a fact.

The truth is that change you long for is coming, but it must happen organically. Humanity is a great undulating beast, that will continue to twist and turn so long as idea's spur the minds of action. As individuals all we can do is input our own conscienceness into the fold and wait and see

Wed, 02/12/2014 - 16:10 | 4429233 denverdolomte
denverdolomte's picture

Great post.

Wed, 02/12/2014 - 18:56 | 4430051 Westcoastliberal
Westcoastliberal's picture

Truth is they DO know what to do but it will end their profit stream, coke & hookers.

Wed, 02/12/2014 - 15:17 | 4428954 I Am Not a Copp...
I Am Not a Copper Top's picture

Is this because of the number of jobs that were "Created or Saved?"

Wed, 02/12/2014 - 15:30 | 4429045 Occams_Chainsaw
Occams_Chainsaw's picture

Don't you mean is this because of the jobs numbers that were 'created'?

Wed, 02/12/2014 - 15:36 | 4429073 youngman
youngman's picture

Obama is speaking right now..and killing Jobs as he speaks...raising costs does not help people get back to work.....

Wed, 02/12/2014 - 15:34 | 4429075 BigRedRider
BigRedRider's picture

I don't need no stinkin job.  I get low cost Obamacare without "job-lock" to pursue happiness.  I also get an Obamaphone, food  stamps, Section-8 with subsidies, and welfare.  What's not to like.  A job?  Huh, how indignent to even utter that scurrilous word.  Just remember, vacation, happiness, and freedom come before work in the dictionary.

Wed, 02/12/2014 - 15:48 | 4429131 NoDebt
NoDebt's picture

You have nothing to feel ashamed of by taking that route.  Choosing to go on the government dole instead of working is morally equivalent.  You should feel good about your choice.  No reason to feel embarassed.  In fact, we would PREFER that more people choose your path and we feel confident they will over the coming years.

Just remember to vote.  Doesn't matter who because we pre-selected both parties' candidates for you, but voting legitimizes this whole process.  So don't screw it up.

Wed, 02/12/2014 - 15:57 | 4429172 starman
starman's picture

In socialism everyone has to have a job! Even if its a blow job!

Wed, 02/12/2014 - 16:17 | 4429255 Kreditanstalt
Kreditanstalt's picture

The ones who ARE still working are making out like bandits if they're grunt workers in forestry, oil, gas etc.  Just look at who has the new $50,000 F-350 pickups, $400,000 mortgages and boats...

They need some labour competition: open the borders!

Don't tell me the few "banksters" are the only overpaid rich... 

 

Wed, 02/12/2014 - 16:46 | 4429432 rosiescenario
rosiescenario's picture

Speaking of jobs.....how about that super feel good Walmart ad on the Olympics....all about putting Americans to work.....even my wife laughed at that one....hypocrisy is the new normal beginning at the top.

Wed, 02/12/2014 - 16:49 | 4429459 rosiescenario
Wed, 02/12/2014 - 17:08 | 4429479 evernewecon
evernewecon's picture

 

 

 

 

This

 

Note it's a pdf 

http://cbo.gov/sites/default/files/cbofiles/attachments/45010-Outlook201...

 

is implying in the future:

just stay home, we'll just sell 

oil from tar sands around the world

 

 

But also, when someone says

the the real fiscal gap (being

large than people think,) it's

privatization's direct cost, 

indirect cost, the cost of 

enforcement, the costs of the

blame game, and the removal of

much of its profits from the U.S.

tax free, with "trickle down" and

"where's the beef" simply 

labeling what's handed out 

after that.

 

 

 

 

 

Wed, 02/12/2014 - 16:54 | 4429502 yogibear
yogibear's picture

How many more Ghost payrollers can Chicago, Obama's home town, include as being employed?

Wed, 02/12/2014 - 18:23 | 4429921 newworldorder
newworldorder's picture

We have come to a point in our society where truth may no longer be a part of the government vocabulary. For that matter, it may not be in the vocabulary of most of us an individual citizens. That however may be left to a topic for another day.

 

All larger corporations - let's say over 500 employees - are very meticulous with their firing/leaving, hiring and payroll data. This data tracks the number of full time, part time and consulting employees receiving any form of wage/salary from the company on a monthly basis. This data is shared wilhin many executive levels in the company. CEO's get this data on a routine basis. Most can even tell you the composition of their work force all the way back to their foundational workforce numbers and certainly within the last 20 years since computerization.

 

Although these numbers are not published outside the Corporate Structure, as they may be proprietary, they could if the government wanted them to - release this data to the BLS or other government departments in an anonymous basis. Instead, BLS and DOL employ countless PhD economists and statisticians to develop elaborate models, whose purpose is to hide and obfuscate rather than inform.

 

Every form of business, private foundations, non profits and tax exempt status entities maintain these records. The bottom line conclusion is that our government would rather guess at unemployment statistics rather than use data that is readily available. The unemployment data that is announced with great fanfare every month is as real as the trillion dollar platinum coin. While it is difficult to prove government intent, an unemployment rate of under 7% looks a lot better than the 20+% unemployment number published by other organiztions including - ShadowStats.

 

Thu, 02/13/2014 - 08:47 | 4431713 bk1037
bk1037's picture

What is interesting in John Williams unemployment actual metrics is how the official version is widening from reality, based on the 1994 methodology. The Feds have drummed this BS into people's heads so they do not know what to believe any more when it comes to measures like this. The one bad thing living in the Land of the Free and the Home of the Brave is that free press has become cheap and tabloid in nature with poor investigation skills, all the while dumbing down Americans who as a group do not show much depth in the understanding as to what is happening to them.

We have lived in a crisis environment for the better part of 10 years now, and sadly it does not look anything of substance will change this anytime soon. The global economy has resulted in a permanent realignment of the US Labor Market into a much cheaper labor source long planned by the multinational corporations. They were going to cut labor costs come hell or high water and they have succeeded. And largely, where did the money go? To investors and the CEOs who benefitted their investors. Capitalism is not a model to be largely emulated any more for that reason. Any system that fosters development of the rich 1% to the exclusion of everyone else, is not a system that should be expanded or emulated but contained. And for all the Obama bashing , the 1% are flourishing now more than ever before except for the 1920s. so I take all this talk about impairments to job creation from the GOP supporters with a grain of salt. The job creators are not creating jobs, f*k them. Tyler's point is absolutely correct, if a business is not hiring, they are not growing, and any so called boasting from some business person about how great business is when they can not say they are hiring is entirely bullshit, and it always has been.

Also, there is one reason why weekly claims numbers are declining to the low 300s from the height of the Great Recession, and thta is because fewer people holding long term jobs are being let go because fewer people are working on that basis. Like anything having to do with unemployment stats from the government, there is much more to this than meets the eye as well. Decline in weekly claims mean fewer long term jobs with people being laid off, not that fewer layoffs with a higher full time job count resulted.  People are now moving to temp or part-time so when they roll off their temp work, they do not get included in this metric unlike before. Congratulations once more to the American media for pointing this out to the American public so they are educated properly (Sarcasm over).

 

 

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