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We just got some important details on the Jobs picture for December from the Job Opening and Labor Turnover Survey, or JOLTS report. The big employment report, like the one for January we got on Friday, only shows the net number of jobs created or lost in a given month.
In any given month, the number of jobs created and lost is several orders of magnitude bigger than the net number. Even in the worst of times there are still people being hired, and even in the biggest of booms, there are still people who lose their jobs.
The JOLTS report shows that there were a total of 4.046 million people hired, and 3.909 people who lost their job (from all causes, including quitting and retirement). While the difference between those two numbers is somewhat lower than the total number of jobs reported to be gained in December of 200,000 (203,000 after revisions), there is always a bit of statistical discrepancy between the two.
The graph below (from http://www.calculatedriskblog.com/) shows the total number of people hired (blue line) versus the total number of people losing their jobs in the month, which is in turn broken down between those who quit their jobs (light blue bars), and those who got laid off, fired or retired (red bars). That little gap between the blue line and the top of the red bar roughly corresponds to the number of jobs created (if line is above the bar) or lost (if below). The yellow line shows the number of job openings.
The report also shows the number of job openings at the end of the month. This is a snapshot, while the hiring and firing is a movie, and some job openings are filled during the month, thus usually the number of job openings is lower than the number of people hired in any given month. However, it is useful to look at the number of job openings and compare it to the number of unemployed.
At the end of December there were 3.373 million job openings and 13.097 million unemployed, for a ratio of 3.88. That is down from a ratio of 4.27 in November and from 4.93 in December 2010. While that is very significant progress, it is still a historically high ratio.
The number of job openings increased by 8.27% for the month and are up 15.58% year over year. The low in job openings was in July of 2009 at just 2.112 million. At that point there were 14.646 million unemployed, for a ratio of 6.93.
In other words, we have seen a 59.8% rise from the lows. The number of unemployed topped out a couple of months later, in October 2009, at 15.421 million, so the number of unemployed was 15.1% below the peak in December (and declined to 12.758 million in January). The next graph shows the ratio since the start of the JOLTS survey data.
Given the strong numbers we saw on Friday, it is highly likely that the ratio is going to show a further decline next month. However, it is unlikely to fall to what could be considered a healthy level.
Unfortunately this is a relatively new data series, and we cannot see how things looked coming out of previous deep recessions. However, this data seems to be telling the same story as the rest of the employment related data. We are headed in the right direction, but still have a long road ahead of us.