Contradictions in New Jobs Data

The meta-analysis of our economy emphasizes its ongoing weakness, but I would like to offer a few points that add some nuance to how it is changing.

Employment: The lack of jobs is driven more by a lack of hiring than by a surge of layoffs. Most of the cutting has already taken place. Unfortunately, new jobs aren’t opening up. This is part of the reason for why it takes so long for workers to re-enter the workforce. Now, people out of work have other problems. There is a bias in the population in terms of age (more young and old, and fewer middle-aged) and there is the self-reinforcing problem that job skills erode as time goes by. Still, the demand for new work is not there.

The most recent data from the Bureau of Labor Statistics express another chapter in this story. The total number of jobs increased, albeit by less than the amount needed to generate a recovery. That means that there was something contradictory to the numbers. We added 39,000 new jobs, but the unemployment rate went up by 2/10ths of a percentage point.

Changes in November from October 2010:

• 45,000 more people with multiple jobs (seasonally adjusted).
• Almost one million fewer full-time workers, but about 600,000 more part-time workers.
• New job openings declined for the third straight month.
• More people quit their jobs than were laid off.

Maybe the quit data goes back to the difference between workers and the unemployed and reflects the relative advantage in the marketplace for the former group.

Job loss data lags the basic summaries of employment and unemployment data. The lack of layoffs is evident, at least from the latest data (quarterly to March 2010, published in November 2010), which says that the number of layoffs was the lowest since 1992.