Counterparties: (NO) VACANCIES
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Who controls how hard is it to get a job in America? The next few jobs reports, including tomorrow’s, Mohamed El-Erian says, will give us some insight into the answer to that question. If the Federal Reserve is effectively in charge, rolling “out one untested measure after the other”, that could help create new jobs. But if our dysfunctional, austerity-inducing Congress has the upper hand, expect job growth to sputter out. Neil Irwin sees things similarly, although he identifies a booming housing market, a rising stock market, and deleveraging consumers as the key forces pulling the American economy forward.
There may be, however, a simpler way to give the economy a shot in the arm: hiring the unemployed to fill vacant jobs. Sounds sensible, right? Here’s Catherine Rampell:
Many companies remain reluctant to actually hire, stringing job applicants along for weeks or months before they make a decision… The number of job openings has increased to levels not seen since the height of the financial crisis, but vacancies are staying unfilled much longer than they used to — an average of 23 business days today compared to a low of 15 in mid-2009, according to a new measure of Labor Department data by the economists Steven J. Davis, Jason Faberman and John Haltiwanger.
This isn’t happening because of a lack of applicants — not when there are more than 3 unemployed Americans for every job opening. And it’s not happening because workers lack skills, either. The common executive complaint, that the average US worker is average, is really just a tautology, and not something you hear during periods of full employment.
For the last few years, the relationship between job vacancies and unemployment, known as the Beveridge Curve, has shifted dramatically. There are now more unfilled jobs than during previous recoveries. Matt O’Brien says this is because employers simply aren’t hiring the America’s long-term unemployed.
In his most recent letter to shareholders, Warren Buffett belittled his peers for complaining that uncertainty was cramping their decision-making. Low growth may be a better explanation. Note that over the last year, US corporations dramatically increased their holdings in Treasuries. They weren’t rushing to buy these safest of safe-haven assets because they doubted America’s workforce. Rather, they doubt America’s future economic growth. — Ben Walsh
On to today’s links: