Data on job openings provide information on the number of workers that employers intend to hire in the near future. This report provides information on the ratio of unemployed persons per job opening, which may be useful to Congress in that it adds nuanced information to the current mix of labor market indicators. Using unemployed persons from the Current Population Survey (CPS) and job openings from the JOLTS, the ratio divides the number of persons generally aged 16 and older who are not employed and actively looking for jobs by the number of job openings. The advantage to the statistic is that the ratio gauges the excess supply of labor relative to the unmet needs of employers. Four key findings arise from this analysis:
1. In the 2007-2009 recession, the ratio rises to very high levels, especially in the goods-producing industries (construction, manufacturing, mining, and logging). 3. 4. Even though the ratio has reduced, it remains at higher levels than prior to the 2007-2009 recession. Job openings are a measure of the demand for workers that are not currently met by employers. The following section discussing the ratio of unemployed persons per job opening as a unique indicator identifies a fourth finding: While the ratio is highly correlated with changes in the unemployment rate, the ratio saw modest improvements coming out of the recent recession sooner than the reductions in the unemployment rate. Finding 1
The ratio of unemployed persons per job opening is highly correlated with the unemployment rate between 2001 and 2012. Finding 2
The ratio of unemployed persons per job opening rises during the recessionary periods covered in this data set. The ratio of unemployed persons per job opening may serve as a useful addition to other labor force statistics providing information on the demand for workers by employers and the population of persons who are currently available for work.
New information that adds to the mix of labor market indicators may be useful to Congress. The ratio of unemployed persons per job opening provides information on how many unemployed persons on average there are for every job opening. It adds to the current mix of labor market indicators such as the unemployment rate, which is a measure of the excess supply of workers. In addition, it adds to employment statistics, which measures the demand for workers that have already been met by employers. By dividing the number of unemployed persons with the number of job openings, the ratio gauges the excess supply of workers relative to the demand, where job openings serve as a measure of the unmet need for workers. The resultant statistic compares the number of persons who are actively searching for jobs to the number of available opportunities.
Four key findings arise from this analysis:
1. The ratio of unemployed persons per job opening is highly correlated with the unemployment rate between 2001 and 2012. 2. The ratio of unemployed persons per job opening rises during the recessionary periods covered in this data set. In the 2007-2009 recession, the ratio rises to very high levels, especially in the goods-producing industries (construction, manufacturing, mining, and logging). 3. Although the ratio is highly correlated with changes in the unemployment rate, the ratio saw modest improvements coming out of the recent recession sooner than the reductions in the unemployment rate. 4. Even though the ratio has reduced, it remains at higher levels than prior to the 2007-2009 recession.
The analysis in this report combines two data sources:
The Job Openings and Labor Turnover Survey (JOLTS), which provide information from a survey of U.S. business establishments on the dynamic job market where job openings are created, persons are hired, and employees leave. The Current Population Survey (CPS), which provides information on economic and demographic information from U.S. households.