Popular Economics Weekly
The U.S. Bureau of Labor Statistics reported the number of job openings was little changed at 5.8 million on the last business day of March, but it is actually up 11 percent over March 2015. Methinks the BLS is being overly modest, as it shows many more available jobs than workers, a sign of future job and economic growth.
Why do we know this? Jobs openings even increased substantially in March to 5.757 million from 5.608 million in February. And Quits are up 9 percent year-over-year, which is when workers leave voluntarily, usually because they are able to find better jobs. These are voluntary separations. (see light blue columns at bottom of graph for trend for "Quits").
Note that hires (dark blue line) and total separations (red and light blue columns stacked) are pretty close each month in the Calculated Risk graph. This is a measure of labor market turnover. When the blue line is higher than the columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.
We also see much improvement in home building, another job creator, as construction jobs are up 1.2 million jobs from their lows, but 1.1 million below their 2006 bubble highs.
The U.S. Census Bureau of the Department of Commerce announced construction spending during March 2016 is 8.0 percent (±1.6%) above the March 2015 estimate of $1,052.9 billion. During the first 3 months of this year, construction spending amounted to $240.4 billion, 9.1 percent (±1.5%) above the $220.3 billion for the same period in 2015.
Lastly, state and local government employment has been the largest drag on job growth. This graph shows total state and government payroll employment since January 2007. State and local governments lost 129,000 jobs in 2009, 262,000 in 2010, 247,000 in 2011, and 29,000 in 2012, for a total of 669,000 jobs lost due to the Great Recession.
And through November 2015, reports Calculated Risk, state and local employment is up 70,000. So, in the aggregate, state and local government layoffs are over - and the economic drag on the economy is over. However state and local government employment is still 561,000 below the pre-recession peak.
So where will all the new jobs come from? There will be a pickup in manufacturing for one, but most jobs will occur in the non-manufacturing service sector, as I’ve said in past columns. That means Professional and Business Services (insurance, et. al.), construction, health care, and Real Estate, now the fastest growing segments.
Harlan Green © 2016
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