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 April, in its JOLTS report. (But that’s not exactly true, as it is up from 5.58 million openings in April 2015.) Hires (blue line in graph) edged down to 5.1 million while separations were little changed at 5.0 million. That means there are many more jobs available than workers to fill those jobs. We are approaching full employment, in other words. And who has most benefited?
Actually, most Americans. This is most evident in the Labor Department’s weekly initial jobless claims on which the unemployment report is largely based, which is at a record low. New applications for unemployment benefits declined by 4,000 to 264,000 from a revised 268,000 in the prior week, the government said Thursday.
Claims sit near the lowest level in decades and have barely budged even though the pace of job creation has cratered in the past two months. The economy added just 38,000 private payroll jobs in May after a mediocre 123,000 gain in April—another sign that we are nearing full employment, by the way, as the easy to fill jobs are mostly gone.
In fact, the average American worker is in less danger of losing a job than anytime in modern history. The percentage of employees who were laid off fell in early June to the lowest level since the government began keeping records in 1949, according to an obscure measure known as the insured unemployment rate buried in the initial claims report. The rate fell to 1.5 percent.
The insured unemployment rate divides the number of people collecting unemployment checks by the number of covered workers who are eligible for benefits if they are laid off. The insured unemployment rate reached a 27-year peak of 5 percent in mid-2009 during the Great Recession, and a record 8.9 percent if workers who were receiving extended emergency benefits are included.
We still have many who aren’t fully employed, however. The U6 category in last Friday’s unemployment report includes people who can only find part-time jobs as well as those who’ve grown too discouraged to keep looking—some 8 million. The rate was about 8 percent shortly before the Great Recession began.
What’s more, a smaller share of Americans are now part of the labor force. The so-called labor-force participation rate has fallen to 62.6 percent from 66 percent at the end of 2007. In other words, only 63 of every 100 able-bodied Americans 16 or older hold a job or are looking for one. The last time the level was that low was in the late 1970s.
We can do better, in other words, and there is so much work to be done with our public infrastructure and investment in new businesses, for starters. That’s when we will truly be fully employed.
Harlan Green © 2016
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