This is another one of my stream of clicks posts where I look up data and post the charts as I find them.
I really have even less “insight” here than in other posts. Vaguely I am looking for evidence of PSST type effects, but more than that I am just trying to get a handle for what’s going on.
One of the things that interests me is quits. They are pro-cyclical which we would expect. However, the interesting thing is that they so dominate layoffs and discharges that the number of “jobs lost” goes down in a recession.
Here is the basic effect I am talking about
Indeed, my hunch is that this more than any other measure will tell us how good the labor market is. Unexpectedly, the more separations there are the better the labor market is.
As you can see separations never fully recovered from the Dot-Com burst and every felt like the 2000s were weak for jobs. As of now separations have not recovered from the Great Recession and everyone feels like the job market is stuck in neutral.
This makes sense when we breakout separations into layoffs versus quits.
As you can see, in normal times most separations are quits. Even now, more people are quitting than are being laid off. More over the movement in the separation level is dominated by quits.
So lets disaggregate quits a bit
Here are straight levels.
Lots of co-movement. Lets do percentage change from a year ago. I like this better than the rate stat the BLS provides.
Again, quits seem to be moving all together in percentage change terms.
I want to take a quick look at openings. I think openings minus quits might be an important stat, but since quits are all moving together we can take a quick look and see if opening are the same.
Strong co-movement here as well.
The two spikes are different though. The abnormal spike in quits was in finance and the abnormal spike in openings was in construction. I am not sure I would read to much into that, however.
Lastly I want just glance at layoffs, to see if the co-movement is as strong.
This seems significantly noiser. Less co-movement. Interestingly the only thing I see very strongly is the general and unusual dip after the Great Recession.
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Sunday ~ June 5th, 2011 at 4:34 pm
Andy Harless
Based on various data (help wanted, business employment dynamics, &c), my impression is that the downward trend in labor market flows (both hires and separations, which must move together over the long time frame unless there is a big trend in overall employment) has been going on since the late 1980′s. I’ve never had a very good explanation for this trend, but it corresponded (at least until recently) to an inward shift in the Beveridge curve — presumably an ongoing decline in structural unemployment, as it somehow became easier to get people into the right jobs rather than having to reshuffle them a lot.
Monday ~ June 6th, 2011 at 9:56 am
Full Employment, Quits and Private Tyrannies | Rortybomb
[...] as there are very few jobs available for people to obtain elsewhere. (Karl Smith has more on the economics of this chart.) Quits can reflect positive developments. Someone has found a better use for their talents and [...]
Monday ~ June 6th, 2011 at 11:18 am
Breakfast Links: June 6, 2011 « colbypenning1128
[...] When the labor market?s healthy, people feel free to quit their jobs giving workers the best form of bargaining power [...]
Monday ~ June 6th, 2011 at 11:36 am
Morgan Warstler
Though JOLTS data doesn’t go back very far it seems to indicate:
We add jobs when the monthly turnover is 5M+. We lose jobs when it heads towards 4M.
Most will say this is cart / horse, but I think this is actually indicative of tax code and regulatory policy favoring large status quo businesses over newco SMBs.
Meaning we WANT churn – we want to see over 6M jobs ended and started every month – on the premise that the correlation is actually the rule.
Any system that encourages favors Creative Destruction, will grow healthy and strong, it will favor the young over the old and smart immigrants over dumb natives (as new tech dwarfs old tech).
It is DUMB to think that in a good economy, workers feel more able to “quit” because it simply pays no attention the fundamentals.
Instead, lets:
Allow SMB owners to freely move profits from one biz to another as tax free capital gains, rather than investment after income.
1. They stop growing their older SMBs that have matured (failed to catch fire), and and partner up and go spend their profits on new stuff.
2. The Fortune 1000 will be forced to compete more aggressively as hundreds of thousands of newcos get spawned on tax free money.
3. The best and the brightest will all go the entrepreneur route.