Policy: Economy

Net job creation slows in 2013

By |
Jobs,Labor,PennAve,Joseph Lawler,Economy,Minusextra,Unemployment

With Tuesday's release of the Job Openings and Labor Turnover Survey from the Bureau of Labor Statistics, the results on hiring and firing for 2013 are in.

Over the course of 2013, 53.3 million Americans were hired, and there were 51.4 million total job separations, for a total of 1.9 million jobs created.

That's not good news, given that it has been almost five years since the recession officially ended in the U.S. It represents a slight slowdown in net job creation from 2012:


 

Labor market churn remains low: There were only 4.43 million hires and 4.37 million separations in December. Prior to the recession, both number regularly cleared 5 million.

While the number of job openings for every jobless worker steadily improved throughout 2013, as it has throughout the recovery, hiring has not kept pace with job openings.

The relationship between unemployment and job openings is represented in what economists know as the Beveridge Curve. The U.S. recovery has seen a rightward shift in the Beveridge Curve, meaning that there there have been more job openings at every value of the unemployment rate:


 

There are competing theories about what has driven this rightward shift in the Beveridge Curve.

One possibility, suggested by the Federal Reserve economists Bart Hobijn and Aysegul Sahin, is that there is a mismatch between the skills workers have and the jobs available in the economy (they also attribute some of the shift to the availability of extended unemployment benefits that might reduce workers' incentives to take available jobs).

In particular, the massive collapse in construction employment might have left millions of U.S. workers out of jobs and lacking the right skills for the opening that have since become available.

The divergence between hiring and openings in construction is particularly stark. Although construction hiring hasn't risen above where it was at the start of the recession, openings soared in 2013:


 

The good news is that, according to Hobijn and Sahin, hiring will eventually pick up, shifting the Beveridge Curve back to normal and lowering unemployment — including long-term unemployment.

View article comments Leave a comment