The BLS has a program called the Job Openings & Labor Turnover Survey (JOLTS) that tracks and publishes data on job openings, hires and separations.
I find this data interesting and one that can elaborate more on what is going on in the labor market than what only looking at the official unemployment rate will. I will be maintaining a spreadsheet to track and graph data from the JOLTS Program as it relates to openings, hires and an interesting ratio called the Stock-Vacancy Ratio.
I found this ratio in a report from the BLS titled “Job Openings continue to grow in 2012, hires and separations less so”. The report can be found here.
My interpretation of this ratio is that deviations from 1, either above or below, signify a labor market that is not efficient or unable to match employers and workers.
While a ratio below 1 seems to be unrealistic, as it would indicate a very tight labor market where employers are unable to find workers and openings stay unfilled, I think it is interesting to contemplate such a scenario.
If the Stock-Vacancy Ratio where to fall below 1, this would indicate that the labor market is unable to fill currently open positions. The ratio itself would indicate the severity, as a smaller and smaller number would represent an increasing supply of jobs with a decreasing number of hires for those open positions.
Note that during the peak of the Tech and Housing Bubble (2000 & 2008) that the Stock-Vacancy Ratio was close to 1. I would not consider this as much a causal relationship between either but I do find it interesting to see that a heated (or overheated) economy seems to show signs of a tight labor market.
What I find interesting now is that while unemployment is still relatively high, but still down about 30% from the October 2009 high, the Stock-Vacancy Ratio has been steadily declining towards a value of 1 since the 3rd Quarter of 2009. Looking at both the number of openings and hires for each month I find it interesting to see that while the number of hires has stayed relatively flat the last four years, the number of openings has continued to increase.
The beautiful thing about data is that 10 people can look at a data set and come up with at least as many conclusions from it. What I see from this data is that there seems to be an accumulation of job openings that have yet to be filled. Is there perhaps a labor shortage?
I’m working on a follow up to this and will have more soon.