Yves here. It’s easy to forget what is going on in the economy, given all the political drama plus too much saber-rattling for comfort. But the Fed is expected to make a rate hike unless jobs data gets in the way. And the state of the employment market is becoming an even bigger driver of political and social stress. Even though the elites and pundit classes take great comfort from the apparent low unemployment rate, the lagging labor participation rate and lack of much wage pressure tells another story. High paying jobs continue to be replaced with low wage and/or part time work.
Another issue not often enough discussed is that employers have gotten so used to weak labor markets that they greatly overspecify what they want to see in a new hire. They want workers to be interchangeable parts, having done precisely the same job somewhere else so they can be productive immediately. It’s one thing to have that as an aspiration, another to insist on it. One sign that the employment market has indeed firmed (but this has been a theme for over a year) is that employers have been complaining that they can’t find “qualified hires”. That means they aren’t paying enough and/or aren’t willing to train. Some business press stories have said business owners are relenting and are willing to train new employees….which used to be the norm.
Warren Mosler has been saying for some time that low unemployment claims aren’t as reliable an indicator as you’d think because a lower percentage of those eligible have been applying for benefits and more recently, new rules mean fewer qualify.
By New Deal Democrat. Originally published at Angry Bear
Once again most of the commentary on yesterday’s JOLTS report for April was that job openings jumped, so everything is Teh Awesome!
To recap one more time…
In the one and only complete business cycle that we have for this data:
- First, hires peaked. They started a long plateau in 2005, making a 3 month peak in late 2005, with no meaningful progress thereafter.
- Second, quits peaked. They started to plateau in early 2006, making a 3 month peak in spring 2006, with no meaningful progress thereafter.
- Finally, openings peaked in Q1 2007
Hires and quits are the only *hard* economic data in the series. “Openings” can be aspirational trolling for a future bank of resumes or, worse, designed to fail and lay the groundwork for cheap H1-B foreign slaves.
So, here is the entire history of hires and quits:
Noisy, but it sure looks like both have established plateaus again. Here’s the YoY look:
Hires are flat YoY, and quits have decelerated from roughly +10% to +5%.
Here’s the close-up of monthly data for the last 24 months, with both hires and quits set to “zero” for April 2015:
Hires made a peak in December 2015, and are actually lower now than they were 24 months ago. Quits recently peaked in January. Beginning next month, they are going to have much more difficult YoY comparisons. For example Quits in April were only 1% higher than 11 months ago in last May. The pattern looks very much like 2006.
Finally, here are job openings:
New record! Whoop-de-doo. At least we aren’t in the equivalent of mid or late 2007.
The good news is, there is nothing in April’s JOLTS data suggesting any imminent economic downturn. The bad news is, it adds to the accumulating evidence of late cycle deceleration in the jobs market.
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In my job searchings I’ve encountered many administrative assistant/office manager type jobs that require a bachelor’s degree (most of them when I lived in Boston). This always struck me as not just elitist, but also bad management. I’ve always thought the best admins are the ones who have been doing the job for 20 years. They know the history, the ins and outs, where to find everything, the long-time customers and vendors. They’ve solved every problem at least three times. There’s also nobody who can actually train that person aside from the person they’re replacing, who usually only gives 2 weeks notice. I’d happily give annual raises to keep someone like that around. Also, hiring is a pain, and a lousy admin messes up everyone’s life. Demanding an admin with a degree basically guarantees you are going to have to replace them every few years, at best.
See – Wellington Management
What annoys me about this is the number of companies who fire the only admin in the entire building, keeping only an assistant for the very seniorest of management (heaven forbid cutting back on the CEO’s status symbol). That leaves the rest of us to wrangle with ordering equipment and everything else in between the work we were hired to do. The admins I’ve seen have been extremely hardworking and so knowledgeable about the organization that it seemed the ultimate in false economy to eliminate their positions (or fail to replace them when they leave). Yet I see this over and over again in tech companies. Office managers aren’t “overhead”, what a short-sighted and elitist characterization…
all humans are an annoyance and ‘overhead’ to these people. They want what the plantation aristocracy and the Romans only dreamed of: Slaves who won’t rebel. That’s what the science of robotics is all about. Creating a utopia for a few thousand families worldwide. The rest of us will live in Favelas and be occasionally hunted for sport. Just like in Columbia.
This is my concern as well
From BLS’s own article about record job openings:
https://www.bls.gov/news.release/jolts.nr0.htm
“Hires
The number of hires fell to 5.1 million (-253,000) in April. The hires rate was 3.5 percent. The number of hires decreased for total private (-257,000) and was little changed for government. Hires decreased in health care and social assistance (-68,000) and real estate and rental and leasing (-23,000). The number of hires decreased in the West region. (See table 2.)”
The writer of this Angry Bear article is right:
“Hires and quits are the only *hard* economic data in the series. “Openings” can be aspirational trolling for a future bank of resumes or, worse, designed to fail and lay the groundwork for cheap H1-B foreign slaves.”
But hey, the gubbies are being tasked to make SOMETHING sound good, aren’t they?
One semi-bright (less dark?) spot for the working poor of this country is the quiet implementation of minimum wage increases. Either through ballots or state legislation, we are slowly seeing wages come up by force in many states to the $12-15/hr level. Seems to be another one of those increasingly common “we cant do it federally because the gov is so broken but the states will slowly do it” type things like pot, gay marriage, etc.
It’d be nice to see single payer go that route but you’d think once one big state like California passed it you’d have a TON of people flocking to CA for the healthcare.
“It’d be nice to see single payer go that route but you’d think once one big state like California passed it you’d have a TON of people flocking to CA for the healthcare”
they have to study whatever bill they pass (if they are even serious about passing such a bill and it’s not easy). I kind of hope not for this scenario, as a recent link showed people are already being driven to homelessness by near $2000 rents on a 1 bedroom, even sharing a room is costly, rental costs are literally making people homeless. I can’t imagine what a massive population influx to California would do.
Students from other states have to work here before getting in state tuition, presumably some such would slow the influx.
But our neolib gov would likely veto.
“Openings” can be aspirational trolling for a future bank of resumes…”
Someone should start a jobs website that flags these. Often they’ll disappear and reappear with a slight change to title or re-wording to disguise how long they’ve been seeking online submissions. I still believe a major factor in long-term unemployment is the online job submission process.
That’s interesting. Can you elaborate?
See the following:
https://fivethirtyeight.com/features/dont-blame-a-skills-gap-for-lack-of-hiring-in-manufacturing/
Note the job opening vs hiring gap. Where I don’t agree with Nate is that automation is responsible. Nowhere does he mention outsourcing.
If automation was to blame, Japan, the world champion in automation, wouldn’t have such low unemployment and slowly rising wages. It may become a significant factor in the coming decades, but it isn’t up to now.
Japan is a well-managed country where enough housing construction is permitted so that tens of millions of people can live in the high-employment cities
my city, Seattle, is wonderful for jobseekers, but folks struggle to move here because rents are high. I live with a pack of buddies. Amazon bulges. property values and pocket money r supportive of public spending, such as a bunch of new urban rail and bus routes. cranes rise above construction sites in many areas of the city, mostly for new housing
the new statutory minimum wages in big cities and states will only proliferate, I think, especially as Dems plot ways to attract non-voters to the polls
huge cohorts of baby boomers r retiring. some of them r pensioned consumers. everyone 65+ has usable medical insurance, which should improve effective demand for caregivers, orderlies, receptionists, custodians, etc
one-party government is usually extends fiscal space. Republicans like to raise military spend, which is relatively protected manufacturing on the equipment side and a large driver of employment on the personnel side. there are nearly a half a million troops, I think, and a bunch of babysitters, lifeguards, etc on bases. they’ve also talked a lot about big tax cuts, which r supposed to b expansive and which raise public debt, whose bonds make for good dealmaking capital. u figure they’ll hire a bunch of ICE and border dudes eventually, too
credit conditions will likely loosen as a generation that hasn’t known financial calamity rises into control in biz and regulators. Republicans may b more permissive, via discretionary regulation or legislation. if this inflates home values in cities, we may see enactment of policies like public pre-k
several of our most important trading partners seem to have workforces that are shrinking or near shrinkage. that should put upward pressure on wages. China, especially, has a workforce that earns higher wages and consumes more with each passing year. even some countries that aren’t very competitive in our categories of tradable goods r growing fast. Trump’s more laissez-faire approach to the environment probably positions US workers to earn a bit of money selling coal, natural gas, and other earth chunks to them. Large LNG and methanol terminals were proposed in Tacoma, just S of Seattle. new pipelines r on the docket within the US and from the US to Mexico. Buffet claims he will invest $5 billion in improvements to BNSF’s freight rail
Blue state – centric businesses with a lot of cash may seek to hire folks in bummier red districts to demonstrate goodwill to the new boss. Salesforce and Infosys recently opened big offices in Indianapolis. Facebook is hiring a few thousand content monitors. Amazon is building its own airport in Kentucky or somewhere like that
the largest US generation ever is only beginning to age into babymaking and household formation. they’ll move to the suburbs and buy cars to get them there. a huge migration of boomers to the sun belt will prompt sprawl that looks nice to bean-counters and building tradesmen
I expect lower low-wage immigration flows. these guys r crucial to homebuilding, agriculture, simple caregiving, kitchen staffing, landscaping, and a bunch of stuff I don’t even know about
huge portions of native workers r too fat, drugged, or wounded to perform many jobs
industries like legal pot, fracking, wind power, and solar power will continue to mature from their already labor-intensive infancies. millennials will become good at their jobs
these won’t necessarily be good times, but I expect them to better than the last few decades have been for wages and levels of employment for able-bodied workers
WooHoo! Halcyon days ahead! You must run out to grab a large bottle of bubbly to celebrate the coming “not necessarily good times” you expect to be better than the last few decades.
I’ll stick to my homemade mead to save money and drink to better times. Nothing you point out cheers me nearly as well as will my next cup of mead.
Do you really see the Dems plot ways to attract non-voters to the polls — and you think that will be successful for Dems? But unfortunately “portions of native workers r too fat, drugged, or wounded to perform many jobs”. Will that mean more hiring for exercise trainers and a big market for dried egg whites and whey?
I hope you’re just fooling me with writing a long sarcastic rant — you just about pulled my leg off! But I’m too serious as the Joker would say — and if not sarcasm … wow!
“They want workers to be interchangeable parts, having done precisely the same job somewhere else so they can be productive immediately. It’s one thing to have that as an aspiration, another to insist on it.”
This is not remotely possible even if prospective hire has done something very similar in the past. If they’re playing pretend with respect to that part of the want ad, you have to ask yourself what else are they playing pretend about.
Sometimes people don’t know what they want until they see it. Do you really want to give it to them is the question.