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US Employment Market Desperately Needs a JOLT

Today (3/11/14) the US Bureau of Labor Statistics (@BLS_gov)  will release its JOLTS figures (Job Openings and Labor Turnover Survey).  It's issued on a one month lag and measures demand for labor.  Today's report will provide data as of January 2014 including job openings, hires, quits, and other separations.  Last month, the JOLTS was at 3.99M and was expected at 4.02M this month. However the JOLTS as of January 2014 stands at 3.97M.  

For the period Jan 2013 to Jan 2014, here's what the JOLTS showed: 

(Source: BLS website; all figures in '000)

  • Job Openings rose from 3,693 to 3,974
  • Hires  grew from 4,389 to 4,535
  • Separations increased from 4,262 to 4,452

As indicated in the graph  below, the amount of "quits" is increasing and this indicates that people are more and more confident in the economy. In and of itself this is a great sign, but as @federalreserve Chairwoman Yellen stated, it creates openings for new graduates and other job seekers.

Image Source: US Bureau of Labor Statistics (@BLS)

Expected on Thursday are US Unemployment Claims issued by the Department of Labor (@DOL) 

Last week, the BLS reported that in February the unemployment rate rose to 6.7% as the economy added 175,000 jobs.  This minor uptick (a very slight increase from the previously reported 6.6%) is attributed not to job loss, but to more people looking for jobs as hiring resumes after a unseasonably cold and brutal winter. 


But how does this factor in with the labor participation rate which sits at 63% - the lowest in 4 decades?  Since unemployment is technically defined as the number of people actively looking for a job that are unable to find one, with 37% of those without a job too disheartened to search for one, the unemployment numbers are certainly skewed.

Another factor to take under consideration is those that are underemployed. For example , someone with a Masters degree working at a college graduate entry level job. This has a negative impact not only on employee sentiment but through creating an imbalance in the system because now those that have a college degree are forced to shoulder the burden of their student loans while working jobs they once held during high school.  No one is earning what they should be earning and this has a negative impact on the economy as a whole.  This is defined by the BLS as "U6" and currently sits at 13.1% for Feb 2014, and paints a different though some would argue more accurate picture of the US employment situation. 

Stay tuned for the US unemployment claims on Thursday.