Just in case yesterday’s Fed announcement and this morning’s numbers on exports didn’t stamp out the last flicker of hope for Recovery Summer, the latest on job prospects has the season looking much more like a winter of American discontent. For the second straight month, job openings at private-sector firms dropped in June, and that’s bad news for the rest of Recovery Summer Bummer:
Company job openings fell for the second straight month in June, a sign that hiring isn’t likely to pick up in the coming months.
The data comes after a weak employment report Friday that showed businesses aren’t adding enough new workers to bring down the unemployment rate, currently 9.5 percent.
Wednesday’s report, known as the Job Openings and Labor Turnover survey, or JOLTS, suggests that won’t change anytime soon.
Why won’t it change any time soon? The JOLT survey counts announced job openings at private-sector companies at the end of each month, not actual hires. It usually takes at least a month or so to fill most openings; as the AP explains, the average length of time to fill an announced slot is around three months. Therefore, the JOLT survey is seen as a near- to mid-term harbinger of future hiring — and two straight months of declines sends a clear signal that joblessness won’t be declining.
The number of job openings in the JOLT survey was 2.54 million, which is an improvement of 26% from a year ago — when employment plummeted in the US and hadn’t hit bottom yet. At its peak, in 2007, job openings in the private sector hit 4.4 million while the economy chugged along at around a 5% unemployment rate. The overall number actually didn’t change in June, though, thanks to a slew of government openings that brought the total number to 2.9 million — which means that a decreasing number of private-sector workers will have to pay for an increasing number of public-sector workers.
The data suggests that we won’t see substantial private-sector expansion for at least another three months, and probably longer than that, with exports and manufacturing dropping in May and June. Recovery Summer may stretch all the way into winter — which really will become a season of massive discontent.