Tuesday, May 21, 2013

US Employment: Employer Behavior

Once again, I'm going to turn to the new employment graph started by the Macroblog website, this time focusing on employer behavior.  And for that, I'll be looking at JOLTS data.  This is a relatively new data set -- in only goes back to the beginning of the 2000s.  This means we don't have the ability to do any historical comparisons.  However, it does give us an objective reading on what employers are doing in the jobs market, which in turn gives us an idea to what they're thinking.

Let's start with a graph of layoffs:

Total layoffs are now at levels below the last expansion.  This tells us that employers aren't adding to the unemployment rate at a high rate.

Here's the definition used by the BLS for this data: a job opening is [a] specific position of employment to be filled at an establishment; conditions include the following: there is work available for that position, the job could start within 30 days, and the employer is actively recruiting for the position.  Put another way, if an employer is looking to add to his workforce, he will advertise a job opening to fill. 

This number -- like most employment numbers -- cratered during the recession.  But, it's been slowly bouncing back to levels seen during the last expansion.  However, note that during 2012 the data series appeared to stall between the 3.6 and 3.8 million level.  This was also during the period when employment growth seemed to stall at moderate levels.

Let's turn now to total hires:

Like the openings data, this number appeared to stall during the 2012 period.  However, the level at which the data series stalled was a the lowest point of the previous expansion.  This tells as that the rate of hiring is still at very low levels.

These two data points are interesting.  While the job openings number has bounced back, the job hires numbers have not.  So while employers want to increase their labor force by posting an opening, they are very unwilling to make the final commitment and hire a person.