Inquiring minds are watching Job Opening and Labor Turnover stats for signs of life.
There were 2.5 million job openings on the last business day of October 2009, the U.S. Bureau of Labor Statistics reported today. The job openings rate was unchanged over the month at 1.9 percent. The openings rate has held relatively steady since March 2009. The hires rate (3.0 percent) and the separations rate (3.2 percent) were essentially unchanged and remained low. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector by industry and geographic region.
The job openings rate was unchanged in October at 1.9 percent. After falling steeply from mid-2007 through February 2009, the job openings rate has been steady at 1.8 percent or 1.9 percent since March 2009.
The hires rate was essentially unchanged in October at 3.0 percent. The rate has remained between 3.0 percent and 3.2 percent since February 2009. The hires level fell by 1.5 million from the most recent peak in July 2006 to March 2009 but has declined by only 133,000 since.
The hires rate was essentially unchanged in every industry and region in October. Over the 12 months ending in October, the hires rate (not seasonally adjusted) declined for total nonfarm and total private. The hires rate decreased over the 12 months for wholesale trade; retail trade; information; accommodation and food services; and state and local government. The rate increased for federal government.
The total separations, or turnover, rate was little changed in October and remained low at 3.2 percent. The total separations rate (not seasonally adjusted) decreased over the 12 months ending in October for total nonfarm and total private. Total separations includes quits (voluntary separations), layoffs and discharges (involuntary separations), and other separations (including retirements).
The total separations level is influenced by the relative contribution of its three components—quits, layoffs and discharges, and other separations. The percentage of total separations at the total nonfarm level attributable to the individual components has varied over time. The proportion of quits had exceeded the proportion of layoffs and discharges every month from the beginning of the series in December 2000 until November 2008 when layoffs and discharges became the larger contributor to total separations. The proportion of separations due to quits fell to a series low of 38 percent in April 2009 but has since risen slightly, standing at 42 percent in October 2009. The proportion of separations due to layoffs and discharges rose to a series high of 55 percent in July 2009 but has since dropped slightly, standing at 50 percent in October 2009.
Net Change in Employment
Over the 12 months ending in October, hires totaled 49.9 million and separations totaled 54.9 million, yielding a net employment loss of 5.0 million.
Losses vs. Openings
The US economy shed 5 million jobs in the year ending in October and there is no significant pickup in the percentage of openings.
One bright spot is the decline in proportion of separations due to layoffs and discharges from 55% in July to 50% in October and the accompanying rise in separations due to quits from a series low of 38% in April to 42% in October.
People voluntarily quitting is an indication there are at least a few higher paying jobs available somewhere, at least for those with exactly the right skill set and mobility.
However, it is also important to note that hiring and separations are still both trending lower after a brief dash higher, most likely as a result of cash-for-clunkers and other stimulus packages that are now withering on the vine.
Hiring Plans No Savior
Recent surveys show Companies in U.S. More Upbeat on Sales Than Jobs.
Chief executive officers, supply managers and small business leaders in the U.S. said a pickup in sales next year will not lead to a surge in hiring, surveys showed.
Three times as many company chiefs anticipate sales will grow over the next six months than project payrolls will climb, according to a survey by the Washington-based Business Roundtable. A poll by the Institute for Supply Management found service companies, which account for almost 90 percent of the economy, forecast additional job cuts in 2010.
Sixty-eight percent of chief executive officers this quarter said they expect sales to grow, compared with 51 percent in the previous three months, the report from the Business Roundtable showed. The group is an association of CEOs of corporations representing a combined workforce of 12 million employees and almost $6 trillion in annual revenue. Nineteen percent said they planned on increasing headcount.
“Services employment has been declining steadily and will continue to decline,” Anthony Nieves, chairman of the group’s services survey said in an interview. “There is going to be slow growth not substantial spikes.”
Confidence among small businesses declined in November to the lowest level in four months, the Washington-based National Federation of Independent Business reported today. Those expecting to take on more staff fell to a net minus 3 percent from minus 1 percent a month earlier, the figures showed. Negative readings signal more owners plan to cut staff than hire more workers. The group’s sales index improved to minus 2 from minus 4, showing pessimism over revenue was starting to abate.
The Business Roundtable’s employment results were more pessimistic than those reported by Manpower Inc. today. The world’s second-largest provider of temporary workers said 12 percent of the more than 28,000 companies it polled planned to hire additional staff in the first quarter, matching the share that anticipated more cutbacks. A record 73 percent projected payrolls will be unchanged.
After adjusting for seasonal differences, the Manpower index turned positive for the first time in a year.
Hiring Plans Anemic
With those kinds of hiring plans, especially in the service sector, unemployment should continue to rise. Remember it takes +100,000 jobs a month just to hold unemployment steady (at least in theory). Given the BLS currently sports a shrinking labor force, month to month totals will vary, as happened with the November jobs report.
Mike “Mish” Shedlock
Click Here To Scroll Thru My Recent Post List