The Surprising Reason Why There Are Now More Job Openings Than Unemployed Workers

As we reported yesterday, for the first time in history, the number of job openings in the US (6.7MM) has surpassed the official number of unemployed workers (6.1MM).

And yet something about that number does not make sense.

When we reported on the jobs number back on June 1, we observed that the number of people not in the labor force has risen to nearly 96 million, and while much of this is due to demographics, and the America's "opioid" epidemic, a lot can be assigned to an increasingly inefficient labor market that lacks dynamism. Subsequent deep dives into the jobs number show us that the health of the job market may not be on a par with where it was back in 2006 , and that the job market "health" may be judging a book by its cover.

One such indicator to note is the amount of churn that occurs between jobs: churn is supposed to give an indication of how active participants in the workforce are in looking for better opportunities than the ones they currently have. In a market where there was recently more job openings than there were unemployed people to fill them, as was reported by the Wall Street Journal, one would expect churn to be at, or exceeding, levels it has previously been at during times of a "healthy" economy.

However, churn data shows no such thing. In fact, churn is still lower than it was in 2006 when unemployment was 4.8%. Some more details from the WSJ, which echoes what we said yesterday, namely that "the economy hit a new milestone in April, the Labor Department reported Tuesday. For the first time since record-keeping began in 2000, there were more job openings than there were unemployed people to fill them. It is the result of the steady job gains that have sent the unemployment rate down to 3.8% last month."

However, "the big surprise is that with all of those openings, people aren’t changing jobs as much as you’d expect."

Alongside the job-opening data it reported Tuesday, the Labor Department also released figures on job openings and what it calls job separations (which include job quitters, people who got laid off and people who retired). That data can be used to gauge how much movement between jobs, or “churn,” is going on. High levels of churn are considered a feature of a healthy job market.

One measure of churn—the sum of hires and separations as a share of overall employment—stood at 7.4% in April, around where it has been for the past year. That is far better than the 5.9% it plumbed in 2009, but still below the 8% it reached in 2006 when the unemployment rate was 4.6%.

 

According to the WSJ's Justin Lahart, the lack of churn likely has to do with the aging of the US workforce, validating the point that unemployment is moving lower because more and more senior citizens, who would normally be expected to retire, are forced to say in, in certain, stereotypical cases as part-time Walmart greeters.

And as workforce ages, older workers are less likely to job hop. as housing costs continue to rise, particularly in some of the core urban areas where job openings are most plentiful. Meanwhile, many workers may still have lingering fears, sown during the recession, about leaving the security of an existing job for a new one.

The good news is that more people are quitting their jobs: the quits rate, which as Nicholas Colas dubbed the "take this job and shove it" indicator, as it measures the degree of confidence workers have in finding a new job, is the highest it has been since 2001. But fewer people are leaving their jobs for other reasons, pushing the churn rate lower.

Meanwhile, for companies, the low churn rate has been both good and bad. The good part is that it makes it easier to retain the employees, which helps keep labor costs lower. That mainly benefits companies that aren’t aiming to grow. The bad part, which mostly affects companies looking to expand their workforce, is that it can be hard to hire people without offering them strong incentives to do so. And those incentives usually involve higher pay.

Comments

brushhog Uchtdorf Wed, 06/06/2018 - 14:09 Permalink

I dont know why anybody would want a job. I hated every job I ever had. I havent worked a job in almost 9 years and Im still officially 20 years away from retirement. It makes no sense to spend all your good years being miserable for the promise of a flimsy stipend to survive on when you are old and broken down. Its backwards. I want all my good years for myself. When the health is gone and I cant live comfortably due to pain or debilitation, better to make a quick end.

Life is too short to work a job.

In reply to by Uchtdorf

toady brushhog Wed, 06/06/2018 - 14:17 Permalink

You're young and you've got your health, what would you want with a job?

I still believe this is a definition issue. What is the definition of a job? I contend that nothing short of 40 hour weeks with beni's is not a job.

Therefore, all these "obamajobs" with shortened hours so they can bypass healthcare,  and even the "Wjobs" that don't provide pensions, do not count as "jobs".

In reply to by brushhog

Last of the Mi… Delving Eye Thu, 06/07/2018 - 07:23 Permalink

I cannot understand how an exhausted senior citizen standing with no area to sit and relax in the 97 degree Louisiana heat with 90% humidity at the garden center with that dumb ass looking blue smock with the yellow target on the back is somehow considered good for business. 

It looks more like human torture to me and the seniors look pitiful attempting to make it through their shift after a lifetime of sedentary behavior. I pity them and my thoughts towards Wally World are a lot less considerate. 

In reply to by Delving Eye

Twee Surgeon brushhog Wed, 06/06/2018 - 15:01 Permalink

There is nothing wrong with a job if it will support a future. Millenial's know the drill because their parents know the drill for a vast majority of the population. Get paid Peanuts while the country is filled with work for less gimgrants and be treated like an easily replaceable surf. America is cutting it's own throat in very slow motion. No future, no worky, sounds reasonable to me. Playing intyo the hands of global slavemasters. I challenge Anyone to act uninformed and apply for a job at some ludicrous job at Mc Donalds or some crap factory and see the hoops that have to be jumped through and the bad attitude Mohicans that will deliberetly make your lfe miserable in the unlikely event that you get past the H.R hens. Just apply for a Mc donalds job for shits and giggles. See if you can get it. Experiment challenge Mc Job.

In reply to by brushhog

DisorderlyConduct brushhog Wed, 06/06/2018 - 16:31 Permalink

I will tell you what I told my son about 20 years ago.

The secret to a good job is to find something you love so much that you'd pay to do it. Then, find someone else that is willing to pay you to do it. For me, this was electronics and software. I spent every dime on these things before my career because I loved doing them. I built computers from components and wrote assembly code because it's freaking fun. Getting paid to do it is awesome.

If you're working a job you hate, that's your own fault.

In reply to by brushhog

cheech_wizard DisorderlyConduct Wed, 06/06/2018 - 18:23 Permalink

Told my son pretty much the same thing. I don't enjoy the electronics and software as much as I used to though.
Still debugging other people's crap code/scripts...

Today's example:
When testing components we generate datalogs which are then parsed with a perl script to create a .csv file which when tossed into excel is a spreadsheet of all the data for all the parts that we just tested.

Well, looking back through our scripts, I came to the rather grim realization that when we tested silicon wafers, we never bothered to put the x/y die position into the csv file. Why? Because the person that wrote the original script apparently couldn't be bothered back in 2013, which in turned was based on an even older perl script.

So I grabbed the script, a few old data logs... and an hour or two later (thanks to some web searches), problem corrected. My problem is for 5 years no one else could even be bothered looking into the problem.

Here's the fucking fix:

} elsif($line =~ m/Site 1: W(-?\d+),(-?\d+)/) {
$diex = $1;
$diey = $2;

Yes, a one line regex expression match...

Standard Disclaimer: Now you begin to understand why I don't love the job like I used to. Because people no longer even attempt to do the job right the first time but will throw any old kludge together and call it good. And then I get called in to fix it.

In reply to by DisorderlyConduct

AGuy cheech_wizard Wed, 06/06/2018 - 18:52 Permalink

Using Perl in the first place is a kludge. Fixing a Perl script is patching a kludge :)

I would hate my job too, if I had to write perl scripts.

FWIW: I would never bother to debug other people's buggy code. Usually when you fix one bug, it causes other bugs somewhere else to pop up, as original code depended on original bug. Think Wack-a-mole. Much easier and faster to just rewrite it, especially if its just a script. It also sucks less to write your own code instead of fixing some elses buggy code.

In reply to by cheech_wizard

cheech_wizard AGuy Wed, 06/06/2018 - 19:25 Permalink

So your suggestion to fix a Perl script is to rewrite it completely in an entirely different scripting language?

I sort of have to laugh at such a ridiculous suggestion, considering the script works fine, it just didn't handle extracting the x and y position of the dies being probed on a wafer. It handles individual component testing just fine.

Occasionally, someone will code up and entirely new test not covered by the perl script. (Then there is always a commercial program called Galaxy to process .stdf files, which we generally output in addition to the datalog text file. Galaxy works, but not as well as some would like it to.) I also generally get paid very well for correcting crap.

> it causes other bugs somewhere else to pop up, as original code depended on original bug.

No, I fixed another bug that I did not put in my original post. Because I test my code thoroughly before release was the reason I found the other bug.

>Much easier and faster to just rewrite it, especially if its just a script.

Mmmm, No. What gave you the impression that this is some simple script?

So which scripting language do you prefer since you want to start re-coding from scratch?

I generally work as a test engineer, which means that when I do need to code up a new test routine, then it is in C/C++ or Visual Basic. I find Visual Basic a pain in the ass, and prefer C over C++ because I learned C first. (Showing my age)...

> It also sucks less to write your own code instead of fixing some elses buggy code.

Of course. Any mistakes you make, you own, and should be able to fix them.

Standard Disclaimer: As your next exercise, I suggest you contact any number of Fortune 500 companies and ask them which scripting language would they prefer you know. Given the age of the company, Perl is preferred with a shift slowly being made to Python over time. (Yeah, it's this shit they don't teach college graduates, nor do they even teach them to ask the right questions)

Standard Disclaimer #2: I generally hate coding, but it pays well.

In reply to by AGuy

AGuy cheech_wizard Wed, 06/06/2018 - 19:55 Permalink

"I sort of have to laugh at such a ridiculous suggestion, considering the script works fine, it just didn't handle extracting the x and y position of the dies being probed on a wafer. It handles individual component testing just fine."

LOL! You're the one that complained about it!

"I generally work as a test engineer, which means that when I do need to code up a new test routine, then it is in C/C++ or Visual Basic. I find Visual Basic a pain in the ass, and prefer C over C++ because I learned C first. (Showing my age)..."

Visual basic is crap. The only programming language that worth using is C\C++, and sticking with long term APIs, not depended on a Libraries that is going to get replaced in a couple of years. C is better than C++ because C++ takes too long, especially if something simple. And if need to reuse one function you don't have to copy the entire C++ class over or butcher the class to reuse some functionally in another project. As long as code to properly and avoid memory\handle leaks C is the way to go.

"Perl is preferred with a shift slowly being made to Python over time"

Pain in the ass, since every few years there is a new version of perl that breaks older code. Say you wrote a perl script 10 years ago and you have to use a newer version of perl to accommodate newer code\libraries. Now you waste hours fixing the old perl script to run on the new version of perl. Waste of time. I have C\C++ apps & tools that I wrote 20 years ago and still are used frequently. I never had to update them for newer OS's, Libraries etc. They just work.

"Mmmm, No. What gave you the impression that this is some simple script?"

Mmmm, its written in Perl! its a script! I am sure you think its complicated, but it not likely a service or even multi-threaded. its just a script.

"Standard Disclaimer: As your next exercise, I suggest you contact any number of Fortune 500 companies and ask them which scripting language would they prefer you know."

I never ask them which language I should use. I tell them what I going to provide them: Apps\tools that works for the long term and does not need to be patched\re-coded everytime there is a new scripting language update or a new OS version. I explain the long term cost savings of using long term stable code and not having to pay me every couple of years to fix it for OS\scripting changes. They seem to really like that idea!

In reply to by cheech_wizard

Robocop5626 DisorderlyConduct Wed, 06/06/2018 - 20:31 Permalink

Tried that but blowing bubbles and coloring neatly inside the lines is never in demand at any price point. Telling any generation to do what they love is a disservice. There is a reason it is called work. Better to instill a love of work overall. That or eliminate unemployment benefits. Hunger is a powerful incentive to broaden work perogatives.

In reply to by DisorderlyConduct

WorkingClassMan Robocop5626 Thu, 06/07/2018 - 01:42 Permalink

The Political Whores pretty much HAVE eliminated unemployment compensation for unemployed slaves...you couldn't live on the shit-peanuts they repay you in the event you happen to be right-to-worked and/or employment-at-will'd.  Political Whores get their largess from the lobbyists, not the working and middle classes...so, the unemployment laws reflect this.

In reply to by Robocop5626

JRobby WorkingClassMan Thu, 06/07/2018 - 06:40 Permalink

That was another "stand over here then we pull the rug out from under you" set up just like the housing boom.

They were paying 100 weeks of UI at a rate thar was helpful after "the crash" which was manufactured. Then that ended and they all stampeded into SSI Disability and EBT.

See all these manipulations for what they are: Mass enslavement.

EIC/child credit, section 8, EBT, etc.. All manipulations of control.

 

In reply to by WorkingClassMan

Hmmm... DisorderlyConduct Wed, 06/06/2018 - 21:32 Permalink

Regarding:

" The secret to a good job is to find something you love so much that you'd pay to do it. Then, find someone else that is willing to pay you to do it. "

 

WOW.  That's Excellent!  Thanks so much.  Ive learned something.  That's an excellent way to look at things.  God/dess only knows what I would be like and what wonderful things I would be enjoying if I had a Mom or a Dad who gave me that kind of encouragement & enthusiasm when I was young, fresh, hopping around & impressionable.

I'll be passing this welcomed & poignant information to my husband & others in my life over the years so that they can appreciate the power of this information.  Perhaps they will be impressed enough to do the same!  {smile}

 You take care now & thank you again for that post!  {smile}  Pam&Punky

In reply to by DisorderlyConduct

DosZap brushhog Wed, 06/06/2018 - 18:04 Permalink

I feel for you, I loved my job,would still be there had they not gone out of business after 50yrs.Really liked my customers and never checked in, if they needed me they called me.Base pay $1k a month, you wanted to make more?, SELL more.

Hell of a deal,plus the percentages varied for 5% used,10% new after net profits.I have a type A personality and it was a perfect job for me(being number 1 was more important than the money,because I GOT to make my own deals no questions asked.)

Made good money(on commissions) and only had to be in the office maybe 1-2 times a week.Produce,be in the top one or two sales persons, and you name your terms.Nice car allowance, and mileage,health ins for entire family for less than 2k a year for 1 or 10 people(the good old days.profit sharing was when I started save a $1.00 in 401k and they matched it $1.00 for dollar sadly I didn't have that perk long).

At Christmas everyone got a MONTHS pay for a bonus(based on your average pay for the year),employees gave Rolex watches to the three owners one year.

Now those were the days.

In reply to by brushhog

Hmmm... DosZap Wed, 06/06/2018 - 21:45 Permalink

Regarding:

               " Now those were the days. " 

 

Wow.  That must have been a v-e-r-y long time ago. ...and Rolex watches...wasn't that from the 80's?  Please forgive my questions if they sound prying or rude.  But how were you able to do something like that?  That seems incredibly loving & generous to your employees.  What did your male friends in & out of the business world think of your behavior?  Did they admire you or did they tell you that you were crazy? What a blessing you are & must have been to those employees & perhaps still are.  How wonderful.  Bosses like you must be a rarity these days but thank god/dess you were there for them back then. {smile}

Thank you so much for sharing that.  {smile} 

Pam&Punky

In reply to by DosZap

brushhog Michigander Thu, 06/07/2018 - 13:39 Permalink

Not on the dole, not a snowflake living in my parents basement, wasnt born rich. I am completely independent. "Entrepreneur"...mmm, maybe, but that might be overstating things. Ive said before here many times;

I took what money I had after working and living in an over-priced suburb for about 15 years, sold my house [ at the right time ], cashed in my 401, and bought a small farm. The farm makes a little profit, I have no mortgage, no insurance of any kind, I grow most of my own food, and heat my house with wood, which I cut. My only real dedicated expense is property tax which is something like 150 dollars a month. Some days I work hard, some days I loaf around and go fishing. Its all up to me. I have electric, landline telephone and an internet connection...I consider them all unnecessary luxuries.

Anyone who cant round up at least a net 400k, who isnt a materialist, and who has the temperament, need not work another job for the rest of his life. You will have to be something of an eccentric...willing to live in ways that modern materialistic people find very strange. You might find me pulling up to a store in a horse and wagon, wearing patched over-alls, sporting a long beard, pumping water, smoking freshly slaughtered pigs, or shitting into a composting toilet.....but you'll never find me at Walmart wearing a smock.

In reply to by Michigander