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Posts tagged with: "JTSJOL"

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Job JOLTS: How long does it take to hire someone?

The JOLTS release in FRED (Job Openings and Labor Turnover Survey) offers a wealth of information about the U.S. labor market, including transitions in and out of employment. The data on job openings are actually very difficult to obtain because employers don’t necessarily advertise or register job openings, so the JOLTS release is especially useful. In the graph above, we use the data to compute a particular ratio, dividing job openings by hires. Usually it’s not recommended to compare “stocks” (job openings) and “flows” (hires). In this case, however, it has a meaning: A ratio of 1 means that it takes 1 month for a job opening to be filled; a higher ratio means it takes longer. It seems this ratio has never been above 1 except for now, which could be a sign that employers are finding it more difficult than any time since 2001 to hire people.

How this graph was created: Search for “job openings” and select the total non-farm series. Then select the edit graph feature: Use the “Edit line 1” tab to add a series by searching for “hires.” Finally, apply the formula a/b.

Suggested by Christian Zimmermann

View on FRED, series used in this post: JTSHIL, JTSJOL

Seeking, missing, finding, and filling jobs

Bloomberg News recently suggested firms may be struggling to find qualified employees. The FRED graph above does show that, for the past year, the number of job openings in the U.S. has generally been higher than the number of hires. So, yes, some positions aren’t being filled. Also, the level of unemployment has been steadily decreasing since 2010, even though the BLS reports that the unemployment rate hardly fell from August to April of this year.

Civilian unemployment rate = (Unemployment level / Civilian labor force) * 100

As the equation shows, for the unemployment rate to hold steady and, at the same time, for the unemployment level to decrease, the labor force must also decrease. So, while fewer “unemployed” people might be taken at face value to mean more people are finding jobs, keep in mind that some people may have simply stopped looking for a job and left the labor force. And firms may not be finding their ideal applicants among the unemployed.

On the other hand, the unemployed may not be looking for the right jobs. For more insight into the current employment situation, visit FRASER (Federal Reserve Archival System for Economic Research) for the Employment Situation—May 2016. This and previous reports from the BLS tally which industries have added or cut jobs in that particular period—potentially useful information for those who want to know which industries are potentially looking to hire. In FRASER, you can explore plenty of interesting publications on employment throughout history. Happy hunting!

How this graph was created: Search for “unemployment level” and select the seasonally adjusted series and click “Add to Graph.” Adjust the timeline to start at January 2007. Add the next series by searching for “hires” and choosing the total nonfarm seasonally adjusted monthly series with level in thousands for units. Add the last series by searching for “job openings” and again choosing the total nonfarm series.

Suggested by Emily Furlow.

View on FRED, series used in this post: JTSHIL, JTSJOL, UNEMPLOY

Help wanted…in measuring the availability of jobs

How easily can firms find workers? How long does it take to hire them? These are crucial questions for economists who study unemployment. Unfortunately, the available data are very bad, but for very good reasons.

The main workhorse models of unemployment include, at their core, “search frictions”—forces that prevent willing workers from matching up with available jobs. The models also rely on the following premises: The more willing workers out there, the more likely an available job is filled. And the more available jobs out there, the more likely a worker finds one. But how does an economist define an available job? Is it a posted job vacancy? In the stylized world of economic models, a worker who is hired fills a vacancy that was posted; the posted vacancy is necessary for the hire. However, as we see in the graph, hires almost always outnumber posted vacancies. Clearly, then, many hires occur without an explicit posting. Elsewhere in the labor statistics world, this reality is acknowledged: Unemployment is calculated every month by asking would-be workers how they searched for a job. Responding to a vacancy is only one of a dozen other methods of searching, including asking friends and relatives. The vacancy posting measure clearly undercounts the number of available jobs.

How this graph was created: Search for and select “Hires: Total Nonfarm, Level in Thousands” (first the seasonally adjusted and then the not seasonally adjusted series) and add them to the graph. To create the ratio, we must add the job openings series. In the “Add Data Series” section, search for and select “Job Openings: Total Nonfarm, Level in Thousands, Seasonally Adjusted” and select “Modify existing series” for series 1 (the smoother blue line, which is seasonally adjusted). Then enter the formula a/b in the “Create your own data transformation” section. Now do the same for series 2 (the rockier red line) with the job openings series that is not seasonally adjusted.

Suggested by David Wiczer.

View on FRED, series used in this post: JTSHIL, JTSJOL, JTUHIL, JTUJOL

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