Economic Jolt: Job Openings and Labor Turnover for September 2009

Today, the Bureau of Labor Statistics released its latest monthly read of job availability and turnover (JOLT) showing that, on a year-over-year basis, private non-farm job “openings” declined 23.38%, job “hires” declined 11.85%, job “layoffs and discharges” increased 10.73% and job quits declined substantially dropping 26.30%.

Job “openings”, the report's most leading “demand side” indicator, has now declined on a year-over-year basis for 25 consecutive months strongly suggesting that the private sector will curtail future hiring activity.

click to enlarge
Sliding down that slope of the Beveridge curve, the decline in the job vacancy rate is clearly corresponding with an equal but inverse movement up in the general unemployment rate as can be plainly seen in the following chart.

Job “hiring” activity has also been declining significantly with the latest results posting the 26th consecutive decline on a year-over-year basis further confirming the tremendous weakness seen in the job market.

With the latest revisions by the BLS, job “separations”, whereby workers and their employers go their separate ways by one means or another (layoffs, retirement, termination, quitting, etc.), appear to be flattening as a result of nearly equivalent but opposing movements in quitting and layoff activity.

It’s important to understand that job “quits” are included as a component of the “separations” data series as “quitting” is a valid means of workers “separating” from employers but their inclusion tends to create an overall procyclical trend in what would otherwise be logically thought of as a countercyclical process (i.e. downturn leads to increase in separations not decrease).

As the economy slides further into recession and the employment situation worsens workers tend to reduce quitting activity presumably for fear that they could risk a long bout of unemployment and the latest results confirm this with the some of the sharpest year-over-year declines on record.

Layoff activity, now separated into its own series and as you can see from the chart below is showing a dramatic surge that is roughly equivalent but opposite to the decline seen in quitting activity.

Comments

[User 353732:]

Big companies don't hire but they do a lot of firing and cash hoarding.The US Regime rewards them with virtually free credit in any amount they desire.

Small, new and start up companies want to expand via innovation and hire but they are denied credit on terms that are remotely fair or affordable ,so they gasp for financial oxygen and struggle for cash.

Is it any surprise that job openings are plummeting and unemployment, underemployment (and replacement employment at well below previous compensation) is mounting?
Feed the job destroyers and starve the job creators is the demented policy of the Regime.

Nov 10 05:05 PM

[TeresaE:]

This has been the policy since Clinton threw open the doors to globalization.

Support the companies that off shore; tax, regulate and allow lawsuits against those that create the most jobs for the masses.

Bush decided to continue the farce so he could wage his own private battle.

Wow, it is working out so great for most of us.


On Nov 10 05:05 PM User 353732 wrote:

> Big companies don't hire but they do a lot of firing and cash hoarding.The
> US Regime rewards them with virtually free credit in any amount they
> desire.
>
> Small, new and start up companies want to expand via innovation and
> hire but they are denied credit on terms that are remotely fair or
> affordable ,so they gasp for financial oxygen and struggle for cash.
>
>
> Is it any surprise that job openings are plummeting and unemployment,
> underemployment (and replacement employment at well below previous
> compensation) is mounting?
> Feed the job destroyers and starve the job creators is the demented
> policy of the Regime.

Nov 11 08:20 AM