More Optimism Than Change in November Jobs Data
Job opening numbers are rising, but it’s necessary to compare them to 2009 to get excited about the data. November 2011 saw a seasonally unadjusted 3.2 million new jobs, the same as in October, but this number is a million more than seen in July 2009. Non-financials and non-manufacturing led the way in November, with leisure and hospitality, arts, entertainment and accommodations categories being the bright spots. However, since the data are not adjusted for the upcoming holidays, these areas could be more illusory than significant. The January numbers will help clarify this uncertainty.
Data for hires reflect much the same patterns: little change from October, and significantly better compared to 2009. Again – arts, leisure and hospitality accounted for the increases. However, hires averaged about one million more in each category than the corresponding job openings. It would seem easy to extrapolate this into a lower unemployment figure, but that number is as much dependent upon the size of the labor force, as new openings. High unemployment implies that any new openings are easily filled, as the number of available applicants is assumed theoretically to be infinite, a situation that does not readily predict wage increases.
Separations (of all types), the other side of the coin, once again conforms to this pattern. Slightly below correspondent hires, the quits rate estimates both opportunities for job upgrades and confidence among workers than leaving their present employers is relatively ‘safe’. Quits rose somewhat in November up to 2 million, again in the nonfarm sector, a good sign but still insufficient for open optimism. Total separations also reflects involuntary quits; the November data are a mixed bag, mostly unchanged from October, but decidedly down from the peak separations number of February 2009. No category in November was an anomaly; the pattern was the same across the board.
In summary, the two November numbers that reflect modest optimism were job openings and the fact that quits exceeded involuntary separations – in November this difference was 0.2 million. By itself this implies increased employee confidence in the jobs market and increased turnover, both being indicators of possible future increases in consumer confidence, the lynchpin of economic growth. While it is still necessary to compare current data to 2009 to see conclusive improvement, November could by itself predict better times ahead; we simply have to wait and see.
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