Businesses advertised fewer openings and hired fewer workers in March than in February, the Bureau of Labor Statistics reported Friday morning.
March’s numbers from the Job Openings and Labor Turnover Survey were unfavorable, with openings falling from 4.1 million to 4 million and hires falling from 4.7 million in February to 4.6 million in March. But the good news is that trend for hiring is headed in the right direction, up 300,000 since a year ago. The openings rate, on the other hand, is no higher than it was in March 2013.
With layoffs near cyclical lows in recent months, job creation and hiring remain the missing factors in healthy net job creation.
Friday's JOLTS report is a sign that labor market churn is not picking up as hoped, although policymakers such as Federal Reserve Chairwoman Janet Yellen have pointed to the unusually cold weather in March as an explanation for the lack of labor market progress.
One positive sign in Friday’s report was a surge in the number of quits, which are usually taken as an indication that workers have enough confidence in the labor market to leave jobs. Quits rose from 2 million to 2.2 million, up from 1.8 million a year ago.
The ratio of unemployed workers for every job opening ticked up slightly to 2.6 in March, but over the last year, it's fallen steeply from 3. The ratio bottomed out just below 1.5 before the recession hit in late 2007.
But the pace of hiring has not kept pace with the steady improvement in openings.
And in some sectors, the problem is particularly noticeable.
In construction, openings have trended up over the past year. The rate of hiring, on the other hand, has actually slowed over the past year — the only industry other than arts and entertainment in which that’s been the case.
That’s a problem, because construction jobs remain 1.7 million below their 2007 peak. Of course, the housing bubble led to unsustainable construction employment right before the crash. Taking population growth into account, however, there’s a shortfall of construction jobs making up a significant total of the overall level of cyclical unemployment.
It’s worth noting that there are a similar number of missing manufacturing jobs: Roughly two million fewer than before the recession. Manufacturing employment, however, has been in a long-term decline since the late 1970s, making it harder to estimate how many of the “missing” jobs are coming back as the economy recovers, and how many should be expected to never return.
The bottom line: Labor market turnover is slowly accelerating, but hiring and job creation disappointed in March.