Ellen Freilich’s Profile
Another JOLT of Bad News on Jobs
As if last week’s dismal employment report was not enough, the clumsily-dubbed Job Openings and Labor Turnover Survey, or JOLTS, offers similarly discouraging signals. No wonder finding a job feels tough: there are nearly five workers (4.7) out there for every open position.
Credit Suisse Economist Henry Mo puts it rather starkly:
Labor demand is simply not strong enough to support a complete job recovery. Even if all job vacancies were filled overnight, almost 11 million workers would still be left unemployed.
Total job openings in May were about 40 percent above the trough of 2.1 million openings in July 2009. But the number is still more than one-third below pre-recession levels (4.56 million in 2007).
Weak labor demand is not limited to just a few sectors, like construction. It’s broad-based. That suggests a cyclical shortfall in aggregate demand, rather than a structural issue, Mo said.
Recent research from Goldman Sachs corroborates the notion that the job market rut is due to a weak economy rather than a mismatch in skills and available jobs. Goldman economists, like Federal Reserve officials, are still holding out for a second-half recovery. But they admit the prospects are looking dimmer, particularly with Europe’s debt crisis spreading and Washington still haggling over the debt ceiling.
The risks remain clearly on the downside. The biggest ones over the next month lie on the fiscal side, both in the US and in Europe.