U.S. Hiring and Firing: No Better, No Worse

Last Updated May 19, 2010 4:31 PM EDT

Looking at the employment picture economy-wide, hiring totaled 4.2 million for March, up 200 thousand from February and 300 thousand from a year earlier. Hiring also outpaced separations for the first time since late 2008. But that means employment is still at the bottom, and is especially weak in the traditional early-cycle construction industry.

From the JOLTS report of the Bureau of Labor Statistics -- the most recent report, last week, is from March.

The number of job openings was little changed in March at 2.7 million but has trended upward since the most recent trough of 2.3 million in July 2009. The job openings level was little changed in March for all industries and all four regions...

The number of job openings in March was little different from 12 months earlier for total nonfarm, total private, government, most industries, and in 3 of the 4 regions over the year. The [number of openings] increased in the West over the year.

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Even after the upturn, however, openings are still well under 3 million, about half a million shy of the bottom of the cycle in the 2003 recession.

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What's valuable about the JOLTS survey is that it looks at hiring, layoffs and quits as separate variables, and so contains important information about people's willingness to pick up and move to a new job or region.

As for layoffs, things are improving:

The layoffs and discharges rate (not seasonally adjusted) fell over the 12 months ending in March for total nonfarm and total private, and was little changed for government. The layoffs and discharges rate fell over the year in many industries and in 3 of the 4 regions-Midwest, South, and West.
Total layoffs were 1.4 percent of the labor force in March, much better than the 1.9 percent a year earlier.

Quits, however, are still quite low, at 1.4 percent nationwide, and are not changing much across industries or regions.

A couple of weeks ago I wrote about the high unemployment in the construction trades. The point was that construction, in particular homebuilding, is a business that tends to firm up early in the economic cycle, but that since housing starts were so slow, unemployment is still very high in this small but crucial sector.

The next graph shows how volatile construction employment can be, as well as the high current level of unemployment in the building trades, and that unemployment has risen in the last few months, in contrast to the drops in other areas.

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In March, the BLS published an article comparing the number of people looking for jobs to the positions available. This analysis provides some real insights about the potential for recovery, because in the short term, people are most likely to get a job in the same field as their last one, and in this punishing recession, few people have the requisite savings to move across the country for something new.

Katherine Klemmer, an economist with the BLS, writes:

With increasing unemployment and a decreasing number of job openings, the ratio of unemployed persons per job opening has increased since 2006 from a series of low ratios ranging between 1.4 and 1.6 unemployed persons per job opening to a high of 6.2 unemployed persons per job opening in November 2009. This is the highest ratio of unemployed persons per job opening since the JOLTS survey began to track job openings in December 2000.
Yikes. With respect to the construction industry, conditions are especially tight:
Construction has shown the most dramatic increase in the ratio of unemployed persons per job opening. From a period of low ratios during the summer of 2007, including a low of 3 unemployed persons per job opening in July 2007, the ratio climbed to a high of 56 unemployed persons per job opening in April 2009. The unemployed-persons per- job-opening ratio stood at 37.2 to 1 in January 2010.

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