No. It just lays there.
Originally published March 6, 2008
Surely all memory of the 1950s send-up of the original “kerplunk goes the tablet that gives the fizz” ad has long faded, but its apt description of the American job market is recently won.
In recent years our job market has indeed lost much of its fizz. This point is best made by the BLS’s quarterly business employment dynamics (BED) series. It comes out with a long delay—figures for the second quarter of 2007 were only released on February 14. But the BED series is very useful in analyzing longer-term trends.
Net changes in total employment over time are a function of gross job losses and gains. For example, in 2006, there was a net gain of 1.7 million jobs in the private sector, according to the BED program. (This number differs from the establishment survey.) But that net gain came from a gross gain of 30.8 million jobs, and gross losses of 29.1 million jobs. That’s quite a furious pace of turnover under a rather placid surface.
But, as the above graphs show, things have really slowed down since the BED figures begin in 1992, as both gross gains and losses have fallen sharply. If you add the gross gain and loss measures together to get a sense of total turnover, you see a drop from the 15–16% range in the 1990s to around 13% in 2007. The latest numbers are just up from all-time lows set in the first quarter of 2007. The change in the net figures, however, shown in the bottom graph, is much less dramatic. The net change in employment was 0.2% in the second quarter of 2007, and total turnover was 13.2%. Net gains were also 0.2% in the third quarter of 2000, as the boom was turning into bust—but total turnover was 15.2%. And net gains were also 0.2% in the fourth quarter of 1992, as we were emerging from the jobless recovery—but total turnover was 15.4%. Gross losses were 7.6% in 1992Q4, 7.5% in 2000Q3, and 6.5% in 2007Q2.
This loss of dynamism helps explain why the initial claims series has lost value as a predictor of monthly job gains and losses. Though net job growth was the same in all three periods cited, claims were almost 50% higher (as a percentage of total employment) in 1992Q4 and 2000Q3 as they were in 2007Q2. Since less hiring was done in recent years than in earlier expansions, it’s quite possible there will be fewer layoffs. Employment growth could slow
through attrition and a hiring strike, without claims spiking as they have in the past, as long as our job market just lays there.
- Philippa Dunne & Doug Henwood