Consider times when employment has declined. What are the causes? An employment decline can come from fewer hires, more layoffs, and people quitting their jobs. But these factors can interact in complex ways. Indeed, the Job Openings and Labor Turnover release from the Bureau of Labor Statistics shows that hires went down and layoffs went up during the past two recessions. But quits went down, not up; in fact, the decrease in quits partially counteracted the impact the other two factors had on employment, even to the point of entirely canceling the increase in layoffs. This makes perfect sense: The incentive to quit a job is lower when there are fewer opportunities.

The graph also highlights that layoffs came back down quickly after the most recent recession to the lowest levels in this sample. So, the sluggishness of hiring is to blame for the slow recovery in the labor market.

How this graph was created: Go to the Job Openings and Labor Turnover release, select the three series (Rate, Seasonally Adjusted), and click on “add to graph.”

Suggested by Christian Zimmermann