The Bureau of Labor Statistics may have released its key employment situation last Friday for the month of June, but there is an interesting report showing the May data on total number of job openings and labor turnover called the Job Openings and Labor Turnover Survey (JOLTS) and evaluate the seasonally adjusted numbers for comparison. What appears to be one of the key factors in the unemployment rate remaining high and the payrolls growth still being under-par for past growth is that workers just are not changing jobs enough currently. After we dug into the data it looks like there needs to be more and more workers who are willing to quit their jobs to move up the ladder for the jobs picture to improve very much.

On the last day of May, there were 3.828 million job openings versus 3.80 million at the end of April. The year over year comparison is up from 3.774 from May of 2012. The hires rate was 3.3% and the separations rate was 3.2%.

Job openings were hardly changed in most industries even though there was growth in May. The areas of growth were in retail trade, with the contraction being seen in professional and business services. Regionally this showed that job openings rose in the Midwest, with the other three U.S. regions mostly unchanged.

The “hires” in May were 4.441 million, but if you back out government jobs it was only 4.155 million in May. That is up from 4.10 million in April, but it is actually lower than the number of 4.231 million hires in May 2012. Suddenly this doesn’t sound too great when you consider that it requires private sector jobs to equate true economic growth rather than government jobs.

BLS data showed that there were 4.323 million total separations in the month of May, up from 4.287 million in April but down from 4.447 million in May of 2012. These total numbers of separations includes quits, layoffs and discharges, and other separations. This is effectively the total worker turnover, but the “quits” are generally voluntary separations initiated by the employee and are a measure of a worker’s willingness or ability to leave jobs. This quits rate remained at 1.6% for total nonfarm and at 1.8% for total private sector, and government quits was little changed at 0.6%.

Over the 12 months ending in May 2013, hires totaled 51.9 million and separations totaled 50.1 million, yielding a net employment gain of 1.8 million. It should be noted that these figures do actually include workers who may have been hired and separated more than once during the year.

Now if you really bore straight down into the total quits numbers, it shows a jobs gridlock. Either workers are either just happy as hell to have their job or they are too complacent to go see if something better in the career path is out there. It may seem counterintuitive but it requires jobs turnover to really create a fluid job market growth. Hiring may still be patchy, but the number of workers (job seekers) for each job opening is only about half of what it was in mid-2009 at 3.07 versus 6 back then.

Again, some of the data may seem counterintuitive that workers have to quit jobs to move into another job either up the ladder or more rewarding in some fashion to get real employment growth. The same is not true over firings because many fired workers do not get replaced or their job is not replaced for months. It suddenly seems possible that the government may put out new Uncle Sam posters saying “Uncle Sam Wants You… To Quit Your Job.”

 

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