(Chart by Calculated Risk shows the official (U3) unemployment rate.)
Two jobs-related statistics released by the Bureau of Labor Statistics Tuesday paint a somewhat mixed picture of what's happening in the labor market. Get ready for a lot of numbers.
First up was the report showing showing that 45 states plus the District of Columbia followed the national trend of reductions in the official unemployment rate. In January, only New York showed a small increase in unemployment (0.1 percent). Four states showed no change.
You can see an interactive map here showing the official unemployment rate for each state and D.C.
During the 12 months from January 2011 to January 2012, job growth exceeded 2 percent in seven states; it rose 5.7 percent in North Dakota, largely as direct and indirect consequence of the state's burgeoning oil industry. Five states—Alaska, Mississippi, Missouri, Rhode Island and Wisconsin—lost jobs during the year. Wisconsin did the worst, losing 12,500 jobs.
Meanwhile, the business establishment survey showed nonfarm payroll employment increasing in 37 states in January and decreasing in 13 states and the District of Columbia. Because the unemployment rate is calculated from a separate survey, it still went down in 12 of those states and D.C. even though the number of people employed also fell.
That seeming anomaly has much to do with people leaving the labor force for various reasons, including becoming so discouraged and not actively looking for a job for so long that they are not counted by the BLS even though they would take a job if they could find one. Critics say a counting system that allows people who presumably want jobs not to show up as unemployed needs, at the very least, some tweaking.
Nevada registered the highest unemployment rate, 12.7 percent. California and Rhode Island posted the next highest rates, 10.9 percent each. An alternative measure of unemployment—U6—that includes people who are working part-time jobs but want full-time work that they can't find and a portion of "discouraged workers" puts the overall situation into better perspective. For instance, California's U6 unemployment rate is 18.6 percent. Both U3 and U6 have been showing improvement over the past 12 months.
BLS also released a second survey called JOLTS—Job Openings and Labor Turnover. That showed the number of job openings in January was 3.5 million. At the beginning of the recession in December 2007, the number of job openings was 4.3 million, up 45 percent since June 2009, when it officially ended. The number of hires was 4.2 million for January, well below the 5 million hires at the beginning of the recession, but up 13 percent since June 2009. Heidi Shierholz at the Economic Policy Institute elaborates:
The JOLTS report also revealed that in January, hires were down by 30,000 and layoffs were down by 39,000. Layoffs are now down to normal levels (the number of layoffs in January 2012 was 1.6 million, very close to the January 2007 level, 1.7 million). However, hiring is still very depressed (the number of hires in January 2012 was 4.2 million, compared with 5.3 million new hires in January 2007).
This raises a question: If layoffs are normal but hiring is still so depressed, how could the labor market be adding jobs every month? The missing piece is the fact that voluntary quits are also currently very low. In January, the number of voluntary quits dropped by 36,000 to 2.0 million, and quits are still more than 30 percent below their pre-recession levels (for example, there were 3 million quits in January 2007).
All else equal, a larger number of voluntary quits represents a labor market where job opportunities are more plentiful and where employed workers have the chance to change to jobs that are a better match for their skills, experience, and interests and where they are more productive and command higher wages. The low level of voluntary quits underscores how the weakness of today’s job opportunities hurt not just unemployed workers but also workers with jobs.
As has been the case for quite some time, all these figures, taken in context, show just how deep the Great Recession (or Little Depression) has been. Even if growth continues to average the 245,000 jobs each month going forward that it has for the past three months, it would take until January 2018 to absorb the number of people out of work since the recession began plus the growth in the working-age population.