U.S. job openings near three-year high
But labor market not as dynamic as it was before recession
Tuesday, February 7, 2012
WASHINGTON -- The number of available jobs in the United States jumped in December to near a three-year high, supporting other data that show a brighter outlook for hiring.
Companies and governments posted 3.38 million jobs in December, the Labor Department said Tuesday. That’s up from the 3.12 million advertised in the previous month and nearly matches the three-year high reached in September.
Job openings in the private sector reached the highest point in almost three and a half years.
Still, overall hiring slipped, and the number of people who quit their jobs also declined. That suggests the job market still isn’t as dynamic as it was before the recession.
Manufacturers, retailers and professional and business services all posted gains. Professional and business services include temporary jobs. But they also include high-paying positions, such as architects, engineers and accountants.
The report on job openings follows Friday’s optimistic employment figures. Those showed employers added 243,000 net jobs in January, and the unemployment rate fell to 8.3 percent.
December was also a big month for hiring, but there were still 13.1 million people unemployed that month. That means an average of 3.9 people competed for each open job in December, the first time in four years that ratio was below 4 to 1.
In a healthy job market, the ratio is usually around 2 to 1.
It generally takes one to three months for employers to fill job openings. December’s big jump in postings is likely one reason January’s jobs report was healthy. But it also suggests job growth may continue in the coming months.
Job openings have rebounded since the recession ended in June 2009,
rising 39 percent since then. But they are still far below the pre-recession levels of roughly 4.5 million.
And hiring hasn’t kept up with job openings. It’s risen only 11 percent since June 2009.
The slow recovery in hiring may be one reason the job market still seems sluggish to many people, particularly those out of work, even as the unemployment rate has fallen for five months straight.
The key issue is how the monthly net job change is calculated: It’s additions to company payrolls minus subtractions. That net figure normally rises as hiring strengthens. But it can also rise even if hiring is weak-- as long as layoffs and quits are relatively few.
Tuesday’s report shows that most of the improvement in December’s net gain of 203,000 jobs stems from lower layoffs and quits, rather than a pickup in hiring.
Layoffs dropped to 1.6 million in December, below the pre-recession monthly average of about 1.9 million. Last year, layoffs fell to their lowest annual total in the 10 years that the government has tracked the data, Tuesday’s report showed.
At the same time, the number of people quitting their jobs, while rising, is also far below pre-recession levels. That’s not such a good thing. Workers tend to quit when they find another job, usually with better pay.
A higher number of “quits” tends to signal a strong labor market, with lots more jobs and higher pay. With pay levels stagnant, not many jobs offer better opportunities. The result: a low-turnover labor market, with few being laid off, few quitting and moderate numbers of hires.
“It’s kind of like when a musical chairs game comes to a halt,” said Jason Faberman, a senior economist at the Federal Reserve Bank of Chicago. “Even with decent job growth numbers, it can still feel to the average worker like a stagnant labor market.”
Any net job gains are still, of course, a good sign. They mean payrolls are growing, and consumer spending can grow. So can the economy.
But the low turnover helps explain why the job market may not feel much better to many people. Especially those without a job.