The falling unemployment rate (6.3% in April) hasn’t done much to dent Americans’ pessimism about the economy. In a Pew Research Center survey released Monday, 65% of people say jobs in their community are difficult to find — down from the record levels seen in early 2010, but far above pre-Great Recession levels. Only 27% say jobs are plentiful.
The disconnect between public attitudes and the official joblessness data supports the idea that the unemployment rate — one of the most widely reported economic statistics, along with inflation and GDP — isn’t fully capturing what’s happening in the U.S. economy. Part of the reason is simple arithmetic: Much of the decline in the unemployment rate comes not from more people finding work but from fewer people actively looking for it, and thus not counted as being in the labor force. (The labor-force participation rate last month, 62.8%, was as low as it’s been since early 1978.)
But the jobs and unemployment numbers are net figures, and obscure much of the U.S. economy’s churn and change — which is the way people looking for work or considering switching jobs or careers actually experience it. Other, lower-profile measures do capture those dynamics; they show that something has changed in the U.S. labor market, and not for the better.
The monthly Job Openings and Labor Turnover Survey, or JOLTS, provides estimates of vacancies, hires, voluntary quits and involuntary separations starting in December 2000. (The latest JOLTS numbers are from February; March numbers are due to be released this coming Friday.) The most immediately striking thing about the JOLTS numbers is how flat hiring has been for some time. February’s seasonally adjusted hiring rate — defined as hires as a percentage of total nonfarm employment — was 3.3%, the same as it’s been since October last year. In fact, there’s been no significant improvement in the hiring rate for nearly three years. By comparison, the hiring rate before the Great Recession typically was at or near 4%.
The quits rate — the number people who voluntarily leave their jobs as a percentage of total employment – has improved somewhat from its 2009-10 lows, but at 1.7% is still well below pre-recession levels (typically 2% or higher). The quits rate is a good indicator of labor-market confidence, since people are more willing to leave their jobs when they’re confident they can find a better one.A release from AfterCollege drives home the point:
83% of graduating seniors said they didn't have a job lined up as of April 2014, despite 72.7% reporting that they were actively looking for one. This is a jump from the 80% of graduating seniors who didn't have a job lined up at the same time last year.
These numbers don’t vary significantly, even for more “marketable” majors—81.6% of engineering, technology, and math majors didn’t have jobs lined up, and business students didn’t fare much better with 85.1% saying they hadn’t lined up jobs either.