Sunday, April 12, 2015

Jobs are up, but what about hiring?

FRED hires and job openings


Recent months have been good for job growth. The Labor Department published a report this past week, and job openings are up to 5.9 million, higher than it has been for almost one and a half decades.

However, as evidenced by the graph above, hiring hasn't been growing nearly as fast. There are a couple of possible explanations. It could be just more structural unemployment, if job availability is growing in fields for which the current pool of unemployed workers is either over- or underqualified. Otherwise, it could just be a longer lag between the employment cycle and the business cycle following a hard recession and slow recovery, as business owners are being more careful and patient when taking on new workers.

If the first is true, it could suggest that the best way to target unemployment and boost the economy is to figure out a way to address the skills mismatch (which, in this time, is especially present in the form of technological unemployment). If it's the second, we may just have to wait out the process.

Do you have any thoughts on contributing factors to this recent trend?

1 comment:

Valerie Chen said...

Some anecdotal evidence for companies being more cautious about hiring: Weber, Wall Street Journal

"These tests have, in effect, raised the bar for U.S. job seekers: With more companies holding an alleged formula for workplace success, fewer are willing to take a chance on anyone who doesn’t measure up."