Counterparties: (NO) VACANCIES

March 7, 2013

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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:

Popular Myths
The US will never, ever turn into Greece – Matt O’Brien

Carl Icahn sincerely hopes he can resolve his differences with Dell in private – WSJ

New Normal
Public colleges are getting less funding, and students are paying more – NYT

Good News
Another way immigrants help the US economy: they buy homes – WSJ

Time Warner will spin off its magazine group into a separate company – NYT
AOL’s Tim Armstrong: If I had my druthers, I’d buy Time Inc – Forbes

Communist China’s congress is increasingly filled with people who are richer than Romney – Bloomberg

EU Mess
Get excited: Draghi expects the eurozone to recover… gradually… in late 2013 – Bloomberg

Scientists discover “spooky action” of particles that travel at 4 times the speed of light – MIT Technology Review

Good News
Americans’ net worth back near pre-crisis peaks – Calculated Risk

“Far more worrisome than a student loan bubble is the student loan anvil” – Chadwick Matlin

“There is no universe in which it’s possible to maintain a site like the Atlantic…without falling back on linkbait blogging” – Paul Carr

Senior financial services exec has an important talking point to relay: stupid ≠ illegal – Politico

Billionaire Whimsy
Billionaire philanthropy club refuses membership to someone worth $800 million – John Gapper

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