(What’s Left of) Our Economy: “Tariff Victim” US Industries Remain Full of Job Openings

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business, China, durable goods, employers, job openings, Jobs, JOLTS, labor shortages, manufacturing, metals tariffs, metals-using industries, private sector, quits, tariffs, Trade, Trump, workers, {What's Left of) Our Economy

If today’s government data on U.S. jobs openings don’t prompt loud mea culpas and apologies from the tariff-alarmists in the Mainstream Media and elsewhere in America’s globalization cheerleading establishment, I don’t know what will.

Recall that Americans have been swamped in recent months with reports that President Trump’s trade curbs have already been decimating American manufacturing.  And since they have been in place the longest, his metals tariffs (on most steel and aluminum imports) have been treated as prime examples, with metals-using industries being the prime victims.

But the new figures on job openings in major sectors of the economy (contained in the latest monthly release of the “JOLTS” numbers – the “job openings and labor turnover series”) are simply the latest statistics thoroughly debunking these claims.

Here are the results for job openings from April (because the metals tariffs began to be imposed in late March) through September (the most recent month covered by the JOLTS reports):

private sector:     +2.30 percent

manufacturing:   +7.08 percent

durable goods:   +7.47 percent

As has been the case with so much other data, the durable goods super-sector of manufacturing – the portion of industry containing the biggest metals-using industries – outperformed the rest of manufacturing and the entire economy in the number of employment opportunities it claimed were available.

And although the number of job openings in durable goods dipped from August to September (whose figures are still preliminary), they fell much less than in the rest of the economy.

private sector:     -2.85 percent

manufacturing     -4.72 percent

durable goods     -0.66 percent

Moreover, the 302,000 durable goods jobs openings reported preliminarily in September were the second largest number on record (going back to late 2000). The all-time high? August’s 304,000.

Some critics maintain that employers have incentives to exaggerate their claims of job vacancies. The motives cited include reinforcing contentions of “skills gaps” and other forms of labor shortages; rationalizing the persistence of high unemployment rates or sluggish wage growth; and pushing government or schools to take on worker training responsibilities (and expenses) that employers are loathe to assume. It’s also easy to see how exaggerated job openings claims can be used to bolster arguments for more immigration – which of course is also a tempting strategy for keeping wages down by increasing labor supply relative to demand.

But even if such exaggeration is rife, why would it be so much more important in durable goods manufacturing than in the rest of the economy? Further, why would employers have any reason to overstate the number of vacancies they’re trying to fill if they believed that their businesses were being swamped by steep, tariffs-led costs increases, or were about to? Wouldn’t they be trying to shed payroll instead? As a result, it’s hard to escape the conclusion that the JOLTS openings numbers simply add to the evidence that, despite the claims of actual or impending tariffs-mageddon, metals-using industries continue to be faring just fine.

Interestingly, workers in durable goods sectors don’t appear to share this optimism fully, according to the JOLTS data. For the figures also measure the numbers of employees voluntarily leaving their jobs – a clear sign of confidence that lots of new opportunities are available. Here are are the April-through-September results:

private sector:     +8.53 percent

manufacturing:    -2.94 percent

durable goods:     -9.48 percent

Clearly, durable goods workers have been displaying less confidence about reemployment opportunities than their counterparts in the rest of manufacturing, and much less than private sector workers overall. And these results are mirrored in the August-to-September numbers:

private sector:     -1.26 percent

manufacturing:    -6.60 percent

durable goods:   -11.76 percent

Nonetheless, in absolute terms, all these quits levels – even for durable goods – remain pretty high by recent standards. And for durables, they’re somewhat volatile, possibly because the absolute numbers have always been on the small side. Indeed, durable goods quits increased by 6.19 percent month-to-month as recently as July. And the August-to-September drop-off was the biggest sequential decline in percentage terms since the 15.70 percent monthly nosedive in August, 2017 – after which the numbers of quits steadily recovered.

As always, these trends could change (or, with the quits rate) intensify. It’s also possible that the President’s more sweeping tariffs on imports from China will be game-changers. (The first round dates only from early July, and the second, much larger round, went into effect in mid-September.) For now, however, the only real news about the economic effect of these levies is that they’ve showed no signs of slowing the recovery’s current momentum. Accept no substitutes.

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(What’s Left of) Our Economy: What “Retail-pocalypse”?

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bricks and mortar, electronic retailing, Employment, hiring, job openings, Jobs, JOLTS, on-line shopping, private sector, retail, {What's Left of) Our Economy

Could the evidence be clearer? President Trump constantly bewails job losses in parts of the economy like manufacturing and coal mining. But he’s ignoring the much larger employment bloodbath in the nation’s retail sector. Worse, the contrast shows what a racist and sexist Trump is, since minorities and women make up much larger shares of the workforce in retail than in factories and mines.

Here’s one answer: The evidence for these propositions could be a lot clearer. Indeed, according to the U.S. government’s employment statistics, it doesn’t exist.

I decided to look at the numbers because the JOLTS data for May came out this morning, and I was once again amazed at the results for retail. As known by RealityChek regulars, these data measure turnover in the labor force, and are highly regarded by no less than Fed Chair Janet Yellen – a leading labor economist. The new figures, which are still preliminary, show that American retailers claimed 638,000 job openings in their businesses, and hired 718,000 new workers (the latter data represent total positions filled, not net new hires).

It’s true that the openings numbers in particular can be dicey. But those for this past May seem pretty consistent with the data going back many years. Moreover, they show that over the last eight years (practically the length of the current economic recovery), retail openings have more than doubled, and hires are up by nearly 31 percent. Both indicators are lower than that for the private sector as a whole (where job openings are up 140.14 percent, and hires are up 45.24 percent since May, 2009). But the gap is hardly yawning. Nor is there any indication from the JOLTS data that retail openings or hires have lost major – or any – momentum in the last few years.

The actual net new job-creation numbers don’t reveal any “retail-pocalyse,” either. Since June, 2009 (when the current recovery officially began) retail payrolls have grown by nine percent. That’s slower than the increase overall private sector employment (14.39 percent). But the gap proportionately was actually greater during the previous recovery, when private sector employment rose by 5.83 percent, and the retail sector’s staffing was up by 3.18 percent.

Maybe this is because, as widely reported, jobs are migrating from bricks and mortars retail stores to on-line shopping businesses? Absolutely. And this trend is indeed rising in importance. During the previous recovery (which only lasted six years, from the end of 2001 through the end of 2007), electronic retail employment rose by 64 percent – just about a third as fast as during the current recovery (174.44 percent).

But in absolute terms, the electronic retail sector is hardly a mass employer. Its workforce totaled less than 260,000 as of this May. Retail overall employed just under 15.85 million that month, and during the recovery, bricks and mortars payrolls grew by a not-too-shabby 1.14 million.

At the same time, the actual employment figures do show that retail hiring is running out of steam, at least for the time being. Year-on-year, the sector boosted payrolls by just 0.12 percent. The previous two May-May annual increases? 1.37 percent between 2015 and 2016, and 1.71 percent the year before. By contrast, employment grew by 12.22 percent in electronic retailing from May, 2016 to May, 2017, and by 12.60 percent the year before. So conventional stores are now losing employees on net.

At the same time, these results are a far cry from a blood-letting. And annual job-creation in the overall private sector has been slowing as well. Further, many observers insist that bricks and mortars companies long built way too many stores. So their payrolls (and overall scale) may, at least to some extent, simply be returning to more sustainable levels. These conclusions obviously won’t satisfy the Trump-haters among us. They’re simply consistent with the facts.

(What’s Left of) Our Economy: JOLTS of Confusing News About the U.S. Jobs Market

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government jobs, job openings, JOLTS, Labor Department, labor shortage, living standards, manufacturing, private sector, productivity, recovery, retail, wages, {What's Left of) Our Economy

Since the U.S. economy has settled at its current level of near-full employment (at least by the official figures), the monthly JOLTS reports issued by the Labor Department have been attracting much less attention – including from me! After all, with so many Americans working, it’s been less important (though not totally unimportant) to learn about one of the key findings in each such survey of labor market turnover – how many new job opportunities business and government say they’ve been creating. 

So it’s not surprising that today’s JOLTS report (for April) hasn’t had much impact on the financial markets this morning. But it still contained more than its share of noteworthy results that reinforce what we think we already know about the economy’s current biggest problems, and that raise major questions about other portions of the conventional wisdom.

The overall job openings number, for example, was quite the stunner: At 6.044 million, it was an all-time high in absolute terms. (The JOLTS series dates from December, 2000.) And the 4.48 percent increase over May’s 5.785 million level represented the biggest monthly jump since last July’s 7.91 percent.

Openings in the private sector hit a new record in April, too (5.464 million). And that 4.20 percent monthly rise was the great sequential increase since last July (8.46 percent).

But as RealityChek regulars know, the economy’s growth has been sluggish even by the meager standards of the current economic recovery. In the first quarter of this year, real growth came in at a paltry 1.15 percent annual rate. So the JOLTS figures indicate that employers feel they need record numbers of new employees even though as a group their output is historically lousy.

That adds up to more evidence that American business boosting its productivity only sluggishly at best – which is awful news given that productivity growth is the nation’s best hope for improving living standards in a sustainable, not bubble-ized, way. And as I’ll be reporting on shortly, the latest government labor productivity numbers once more confirm that the economy is stuck in a productivity crisis.

Yet these JOLTS results carry more complicated implications for another broadly accepted feature of the American economy. They support the idea that U.S. businesses are struggling to overcome almost unprecedented labor shortages. How else to explain the enormous number of reported job openings? But companies that desperate to find workers should be raising wages at rapid and indeed accelerating rates. Everything that we know about hourly pay, though, tells us that nothing of the kind is happening. If anything, wage growth, which has underwhelmed throughout the current recovery, is showing signs of slowing.

One other new record revealed by today’s JOLTS report – total government job openings (540,000) have never been higher except in April, 2010, when the call went out for temporary Census workers. Even more interesting, most of the openings were in state and local governments outside the schools.

Also somewhat surprising: The “retail-pocalypse” so commonly bemoaned or hailed (depending on your viewpoint) is nowhere to be seen in this JOLTS report. Sure, retail job openings fell between March and April from 593,000 to 577,000. Moreover, that’s the lowest level since December, 2015, and the numbers now are generally, though unevenly, trending down. But for the first more than seven years of this nearly eight-year old recovery, they were trending solidly up. With overall economic growth down and consumers still cautious, the reported retail openings numbers are far from screaming “disaster!” – or even “serious trouble!”

Finally, although manufacturing output has been modestly recovering lately from its most recent recession, its job openings fell from 404,000 in March (the second highest record and best since January, 2001’a 496,000) to 359,000 in April. Still, the decline followed a major increase in March (from 364,000), and the manufacturing numbers have been pretty volatile for more than two years.

Maybe the safest conclusion to draw from the JOLTS numbers is that, for now, the economy is heading for more of the same. Whether that’s the safest result for incumbent American politicians is another matter entirely.

(What’s Left of) Our Economy: This JOLTS Report Won’t Likely Jolt the Fed

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Employment, Federal Reserve, interest rates, Janet Yellen, job openings, Jobs, JOLTS, turnover, {What's Left of) Our Economy

It’s time again for the monthly JOLTS report – for July – an occasion eagerly anticipated by the economics, business, and investing worlds because these data on turnover in American employment are known to be among Fed Chair Janet Yellen’s favorite measures of the labor market’s health. As a result, they’re likely to play a big role in her decision on raising interest rates – which could come next week. This latest edition leaves one recovery-era story intact – regarding the outsized importance of low-wage jobs during this long but weak expansion). But another trend – the prominence of subsidized private sector positions – took something of a hit.

The JOLTS data track how many Americans are being hired and leaving their jobs, the reasons for the departures (voluntary or involuntary), and the numbers of job openings posted by employers each month. I focus on the openings, since they say the most about what employers are seeking, and therefore which sectors of the economy look to be the most robust,at least in terms of employment-creating power. And as known by RealityChek regulars, the share of openings accounted for by low-wage sectors has risen steadily during this recovery.

In July, low-wage businesses – in retail, leisure and hospitality, and the low-pay sub-sector of the generally high-paying professional and business services sector – were responsible for 32.91 percent of all job openings companies said they posted. That’s not a record for the recovery, but it’s not far off. (Also, it’s only preliminary.) Moreover, it’s about a full percentage point higher than the 31.90 percent final figure for June, which was downwardly revised from 31.99 percent.

For comparison’s sake, when the last recession began, in December, 2007, this figure was 31.94 percent. When the recovery began, in June, 2009, it had sunk to 28.38 percent. Maybe this partly explains why Americans are so down on the economy even though it’s officially been growing for more than seven years?

The subsidized private sector consists of those industries where levels of activity (including hiring) are determined largely by government decisions, even though they aren’t formally government-owned. Healthcare services are the leading example. Just as they’ve spearheaded job creation during the recovery, they’ve also generated a disproportionate share of jobs openings recorded by the JOLTS reports. In July, the number was 18.36 percent.

That’s not only much lower than the June figure of 19.97 percent (which was revised up from 19.90 percent). It’s nearly as low as it stood at the recession’s onset (18.31 percent). Yes, when the recovery began, subsidized private sector jobs accounted for 20.31 percent of all announced job openings. But at that time, American employment creation was still deeply recessed — to the point at which healthcare services in particular were practically the only game in town.

Since the Fed says it’s interest rate decision will be determined mainly by the economic data as it comes in, and since recent indicators for the U.S. economy have rarely been more confusing, even the central bankers may not know what they’re going to do when they meet next week. But if the above JOLTS internals shape their conclusions much, bet on yet another “Hold.”

(What’s Left of) Our Economy? New JOLTS Data Provide Little Visibility on Jobs

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Employment, Federal Reserve, Great Recession, Janet Yellen, job openings, JOLTS, low-wage jobs, recovery, turnover, wages, {What's Left of) Our Economy

I’m not sure why the economics and investment world seems pretty uninterested in the new figures released this morning on labor turnover in the U.S. economy. After all, as RealityChek regulars know, these are among the favorite labor statistics of prominent labor economist – and Federal Reserve Chair – Janet Yellen. And she has a lot to say about how low or high interest rates will be, and therefore about how vigorous or weak the current historically feeble recovery will become. Maybe it’s the dog-days-of-August syndrome?

What I am sure of is that the level and makeup of the job openings reported in the new “JOLTS” data leave plenty of room for debate over a key question overhanging the economic progress America has made since the Great Recession: Have hiring and opportunity been too concentrated in low-income sectors?

There’s no doubting that the share of job openings recorded in today’s release in low-wage sectors* is higher (32.17 percent, for June) than it was when the recession began at the end of 2007 (31.94 percent). But it’s not that much higher. This percentage, however, is much higher than it was when the current recovery began, in the middle of 2009 (28.38 percent). So over the longer haul, the “low-wage recovery” story remains intact.

Yet does this trend show more recent signs of ending, or at least moderating? That’s what the new numbers leave so unclear. For example that 32.17 percent figure for June (which is preliminary) is much lower than May’s final 33.30 percent. But the May number was revised up from its original 32.53 percent.

The initial June figure is also much lower than that of June, 2015 (33.67 percent) or June, 2014 (32.60 percent). But the comparable May numbers don’t tell a clear story. They fell from May, 2014 to May, 2015 (33.50 percent to 32.34 percent). But then they rose to that 33.30 percent this May.

It’s a good rule of thumb when examining data that the strongest (underlying) trends are revealed by looking at the longest time periods. But it’s also true that “things change,” and that the kinds of fluctuations seen over the last two years could be signs of a top – just as they sometimes (but only sometimes) are in stock prices. For now, it seems that the firmest conclusion we can draw is that more of the real picture will be revealed by the next set of JOLTS figures, which we’ll get next month. Unless of course it isn’t!

*These sectors are retail, leisure and hospitality, and the administrative and support services subsector of the big professional and business services sector.

 

 

(What’s Left of) Our Economy: No JOLTS to the Low-Wage Recovery Story

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Employment, Great Recession, James Fallows, job openings, Jobs, JOLTS, manufacturing, manufacturing renaissance, recovery, The Atlantic, turnover, {What's Left of) Our Economy

One of those running-around days prevented me from commenting yesterday on the new U.S. government figures on labor force turnover. But since they’re a favorite indicator of Federal Reserve Chair Janet Yellen. and since last month’s figures contained a big surprise, the so-called JOLTS report for May is worth a close look.

First, that surprise. The April JOLTS figures (there’s a two-month time lag for this series) showed a startling 23.15 percent sequential jump in the number of job openings in manufacturing. Moreover, the 415,000 figure was the second highest of all time. The increase, which produced the second highest monthly total of all-time (JOLTS statistics only go back to 2000), convinced observer’s like The Atlantic‘s James Fallows that this long-time employment laggard was suddenly “creating too many jobs.”

As I noted last month, the number looked fishy because it contrasted with virtually everything else we’ve learned about manufacturing in recent years – along with many longstanding assumptions.

So it wasn’t entirely surprising to see that the new JOLTS report revised that April manufacturing figure down to 397,000 – still historically high, but no longer so stratospheric. Just as important, the May total (which is still preliminary), was 353,000. That’s healthy, but has been bested several times in the last decade and a half. Let’s hold off, therefore, on heralding the return of the manufacturing renaissance meme – which has never been justified in the first place.

Second, the May JOLTS figures strengthened claims – including by yours truly – that the current American economic recovery has featured entirely too much low-wage job creation. Since I last looked at this subject through the JOLTS lens, past figures have been revised. But they tell the same story, according to my methodology of taking the reported openings in the retail; and leisure and hospitality employment super-categories, and then adding a pro-rated figure I calculate for the low-paying administrative and support services sector of the generally high-paying professional and business services super-category.

When the Great Recession began, at the end of 2007, these low-wage portions of the economy accounted for 31.94 percent of all job openings. By the time the recovery began, their collective share fell to 28.38 percent. The (preliminary) level for May? It’s rebounded past the pre-recession level and climbed to 32.53 percent.

Employment figures like the JOLTS data have been strongly influencing the Federal Reserve’s decisions on whether to raise or lower interest rates – which in turn helps determine how fast and whether the economy will continue growing, at least in the near future. If the central bankers look at the above crucial JOLTS details, keep expecting the country to stay on its (incredibly) easy money course.

(What’s Left of) Our Economy: A New JOLT to the Manufacturing Conventional Wisdom

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capex, factory orders, Federal Reserve, industrial production index, Janet Yellen, job openings, Jobs, JOLTS, Labor Department, manufacturing, wages, {What's Left of) Our Economy

Since Janet Yellen is a leading labor economist as well as Federal Reserve Chair, and she closely follows the monthly so-called JOLTS reports, so do I. So should you if you’re interested in how the U.S. labor market is faring and therefore (to a great degree) whether the central bank will move to stimulate the economy or cool it off.

My main interest in these data has focused on what light they shed on job quality – and specifically on whether the job openings reported in these surveys of employment turnover have come mainly in low-wage or high-wage sectors. (My work shows it’s the former.) But this morning’s JOLTS numbers from the Labor Department contained such astonishing results for manufacturing that they deserve special attention – and not simply because the April data were so exceptional, but because since the last recession began, they have contrasted so strikingly with other measures of manufacturing’s performance.

According to the new JOLTS report, America’s manufacturers reported 415,000 job openings at their companies in April. That’s the second highest figure on record (the data go back to the end of 2000), which is newsworthy enough. But it also represents a 23.15 percent jump from the March total of 337. Just as interesting, the year-on-year increase is 23.15 percent, too.

Logically, this surge means that manufacturers became much more optimistic about their prospects in April. Why else would they be looking for so many new workers? Yet nothing else we know about domestic manufacturing in April would seem to justify this optimism.

For example, in inflation-adjusted terms, manufacturing production inched up only by 0.33 percent in April over the March levels – a decent performance by recent standards, but no standout. Since April, 2015, manufacturing output rose by only 0.54 percent.

Do future-oriented gauges of manufacturing signal the appearance of great expectations? New orders for manufactured goods in April did rise by 1.92 percent on month (these are not price adjusted), but that kind of improvement is nothing exceptional. Moreover, year-on-year, this measure of incoming work is down 1.80 percent.

But this disconnect between the job openings data and other manufacturing statistics doesn’t just stem from one month that could be a classic outlier. (Also, the data will be revised next month.) It’s been the case since the recession began.

During the downturn itself, JOLTS trends did follow the other gauges way down. Between the slump’s onset, in December, 2007, and manufacturing’s employment bottom, in March, 2010, industry’s job openings plunged by 45.11 percent. During this period, real manufacturing output sank by 14.92 percent, and factory orders dropped by 16.73 percent. So far so good.

But since March, 2010, the number of job openings reported by American manufacturers has skyrocketed by 184.25 percent. This increase has left in the dust the rise in constant-dollar industrial production (12.68 percent) and manufacturing orders (15.40 percent). And even if you take out the unusual April manufacturing job openings number, the gap is still enormous.

In fact, since the recession began more than nine years ago, manufacturing job openings are up by 56.01 percent, even though real output is down by 4.13 percent and factory orders have fallen by 3.91 percent.

This gap suggests that the conventional wisdom about the relationship between manufacturing employment and manufacturing output need some big rethinking. After all, it’s become a commonplace that manufacturing has no chronic output problem – it does, however, have a serious jobs problem (which is rarely described in this context as a problem) because technology makes it possible to turn out more products with fewer workers.

But the picture created by combining the JOLTS, production, and orders statistics indicates that modest gains in production and orders have been spurring a tremendous increase in the demand for workers. How can that be if the sector is so increasingly capital-intensive? Further, standard economic theory teaches that when businesses find themselves short of labor, they either boost wages in order to attract more applicants, substitute technology (machinery, equipment, software, etc.) if they don’t feel like offering higher pay, or respond with some combination of these steps.

Yet as I’ve exhaustively documented, until very recently, manufacturing wages have been going nearly nowhere. And businesses overall have displayed few signs of significantly increasing their capital spending (on that new machinery, etc.) – at best.

Of course, it’s possible that all of these government statistics are wrong. But I suspect it’s more likely that the so-called experts know much less about manufacturing than they think.

(What’s Left of) Our Economy: Low Wages Still Dominate This Recovery

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Federal Reserve, inflation-adjusted wages, interest rates, job openings, Jobs, JOLTS, recovery, wages, {What's Left of) Our Economy

The big economic news this week has been the Federal Reserve’s decision not only to keep interest rates at their still super-low level, but to signal that they will stay there longer than previously indicated. This Fed dovishness has many economists and finance types indignant, since they believe that the American economy is amply strong enough to withstand more normal credit costs, and because they fear that ongoing floods of easy money will encourage the type of reckless investment that helped inflate the housing and spending bubble of the previous decade.

I agree with the bubble fears. But it’s hard to believe that anyone bullish on the U.S. economy has been looking at the data. For we got two major indications this week that American performance is still failing a key test – spurring strong enough growth to produce a healthy labor market characterized by adequately rising wages.

The first batch of evidence came on Wednesday, when the Labor Department issued its latest report on inflation-adjusted wages. Once again, they powerfully undermined the widespread view that this measure of pay is showing signs of meaningful life. The data revealed that after-inflation hourly wages for all private sector workers flat-lined month-to-month between January and February. Revisions were positive, but only microscopically so on net, with January’s monthly gain raised from 0.38 percent to 0.57 percent (the best such improvement since last January). But the December number was lowered from 0.19 percent to 0.09 percent.

In addition, let’s not forget that, for the last two Januarys, wage figures have been significantly influenced by mandatory minimum wage hikes in many states – which reveals nothing about the underlying vigor of the labor market.

Year-on-year, the new statistics look little better. From February, 2015 to February, 2016, inflation-adjusted wages were up only 1.23 percent – considerably less than their 1.94 percent rise between the previous Februarys. In fact, it’s the lowest annual increase since last August’s.

As a result since the current economic recovery began in the middle of 2009, real private sector wages are up a grand total of 3.39 percent. That’s over a nearly seven-year stretch.

The story in manufacturing is pretty dismal, too. February after-inflation wages rose just 0.09 percent from January levels. January’s 0.28 percent monthly improvement stayed unrevised.

On an annual basis, real manufacturing wages rose 1.22 percent in February – also less than the 1.33 percent increase from February, 2014 to February, 2015. But at least it was better than January’s year-on-year improvement of 1.13 percent. These results left real manufacturing wages a grand total of 0.37 percent higher than at the start of the recession – rounding error territory.

The day after these dreary wage numbers were released, Labor came out with its monthly figures on turnover in the labor force. As known by RealityChek regulars, these figures are taken very seriously by Fed Chair Janet Yellen, so I track them as well, and focus on the job openings (“JOLTS”) data. Throughout the recovery, they’ve told a tale of a labor market increasingly dominated by low-wage sectors of the economy. The new statistics, which cover January, and incorporate revisions going back to 2000, sustain this narrative.

To review, I define low-wage industries as comprising the retail sector, the leisure and hospitality sector, and the administrative and support sub-sector of the professional and business services sector. The turnover data doesn’t break out the latter, but I (reasonably) assume that job openings in the industry resemble its overall employment levels.

At the beginning of the last recession, according to the latest figures, in December, 2007, these low-wage sectors together generated 31.94 percent of the economy’s total job openings. By mid-2009, when the current recovery began, their share actually fell to 28.38 percent. But in January, they stood at 32.34 percent.

Individually, the real wages and the turnover figures tell a powerful enough story of a national job-creation engine missing some major cylinders. By reinforcing one another, their collective message seems irrefutable. There’s still a legitimate debate over whether continuing the Fed’s super-easy money policy is the best way to heal the American labor market. But there can’t be much legitimate doubt that such healing remains urgently needed.

(What’s Left of) Our Economy: So Many Job Openings – For So Little Pay

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Federal Reserve, Janet Yellen, job openings, JOLTS, Josh Zumbrun, labor market, The Wall Street Journal, {What's Left of) Our Economy

Wall Street Journal economics reporter Josh Zumbrun did an excellent job this week showing that Janet Yellen’s favorite gauge of the American labor market’s health has been recently been performing exactly how the Fed Chair has been hoping. The implication is that the case looks strong for the central bank to start raising interest rates – possibly as early as its meeting next week.

If Yellen – a noted labor economist – simply looks at the overall numbers in this JOLTS series, that assessment seems on target. But if she looks to see where the strength has been centered in this measure of the employment scene’s dynamism – and especially where job openings have increasingly been concentrated – she might be more cautious about tightening the country’s credit supply. For the new October figures show that their domination by low-paying sectors is up significantly.

My definition of low-paying sectors encompasses the retail industry, the leisure and hospitality industry, and the low-paying administrative and support services sector within the professional and business services category. The latter number isn’t explicitly reported by the Labor Department, which compiles all the JOLTS data. But I estimate it by (reasonably) assuming that administrative and support openings match this sub-sector’s share of the larger grouping’s total employment in a given month.

The total openings in these low-paying sectors came to 36.83 percent of all job openings in October. This preliminary number is actually a bit lower than the average for July through September: 37.23 percent, 36.63 percent, and 37.03 percent, respectively. But all of these numbers are considerably higher than last October’s final 33.26 percent.

And they’re higher still than the levels at the start of the last recession (30.46 percent) and at the downturn’s end (29.48 percent). Couple these findings with the share of hirings accounted for by the government-subsidized private sector of the economy, and for a Fed that portrays itself as being “data dependent,” and that prizes the JOLTS figures, the result isn’t exactly screaming “Mission accomplished” for America’s beleaguered workforce.

(What’s Left of) Our Economy: U.S. Employment Gains Have Been Heavily Subsidized by Government, Pt 2: Giving a JOLT to Job Openings

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Employment, Federal Reserve, healthcare services, job openings, Jobs, JOLTS, nonfarm jobs, private sector, private sector jobs, subsidized private sector, {What's Left of) Our Economy

Yesterday, RealityChek reported on how the U.S. economy’s subsidized private sector has been dominating total job creation during the current economic recovery. Today, we’ll document another way in which these industries – which are heavily dependent on government subsidies – are playing a similar role when it comes to job openings. That measure of the labor market is especially important, since it’s a part of one of Fed Chairman Janet Yellen’s favorite measure of the health of American employment – the so-called JOLTS report that tracks job openings, layoffs, and turnover.

The JOLTS data for October came out yesterday, and show that total non-farm job openings in the United States two months ago (the American employment universe according to Labor Department statisticians) totaled 5.383 million. That still-preliminary figure is the third highest for the economic recovery, which began in June, 2009.

According to the JOLTS report, the private sector accounted for 90.79 percent of those openings, which seems to indicate that the vast majority of American job-creation for the foreseeable future will be coming in that part of the economy that typically generates most of its productivity growth and innovation, since its performance is largely determined by free market forces.

But as we keep noting, much of America’s so-called private sector is comprised of industries, like health-care services, where levels of consumption, output, and therefore hiring depend heavily on government spending. In October, the JOLTS report revealed that this subsidized portion of the private sector accounted for 19.86 percent of job openings. Consequently, the “real” private sector share was only 70.93 percent.

The difference in just one year has been eye-opening. In October, 2014, the subsidized private sector was responsible for only 17.61 percent of total job openings, and the real private sector generated 73.95 percent.

Last October and this past October, the real private sector performed much better in this regard than at the beginning of the recovery. Then, it accounted for only 64.74 percent of all job openings, and the share of the subsidized private sector was way up at 21.98 percent. Back then, though, the private economy was still wheezing (employment is usually a lagging economic indicator), and health-care services were holding up the entire U.S. labor market.

A better comparison might be with December, 2007 – when the last recession technically began. The economy was already suffering from the bursting of the housing bubble, and consequent Wall Street turmoil. But the real private sector still produced 72.08 percent of all U.S. job openings, and the subsidized private sector share was 17.74 percent.

In other words, government subsidies are responsible for a higher percentage of the American economy’s new employment opportunities today than at the end of the last economic expansion – even though today’s recovery is more than six years old. Moreover, the October-to-October comparisons show that the trend is moving in exactly opposite of the desired direction, in which the real private sector would be increasingly important in the country’s employment picture.

As I’ve repeatedly stated, the subsidized private sector is an essential part of the economy – and it’s hard to imagine how the government could completely or even substantially exit areas like health-care services for the foreseeable future even if the American people wanted this result. (And there’s no indication that they do.) But the subsidized private sector’s historically large, outsized role in not only job-creation but job-opportunity creation seems more like a sign that the U.S. labor market remains badly damaged from the financial crisis and ensuing recession, not that it’s nearly recovered.