Monday, November 12, 2012

Both new hires and layoffs decline in U.S. West during September

The number of new hires in the U.S. West, which includes Colorado, fell 16.5 percent year over year from September 2011 to September 2012. Layoffs also fell, dropping 9.9 percent during the same period.

According to the latest Job Openings and Labor Turnover report (JOLTS), released last week by the U.S. Bureau of Labor Statistics, the West decline of 16.5 percent was larger than the nation overall which showed a smaller decline of  3.3 percent in new hires, when compared year over year. During the same period, layoffs fell 5.1 percent in the nation overall, compared to the West's drop of 9.9  percent.

September's year-over-year decline in new hires was the largest drop since 2010 when employers were still dealing with the effects of the 2008-2009 recession. 

The first graph shows the year-over-year change in new hires and in layoffs in the U.S. West region.

In the second graph, we see the total number of new hires compared with the total number of separations, including quits, layoffs and other separations.

Note that when total hires (the blue line) are above separations (the purple bar) then a positive net number of jobs have been added to the economy. September 2012 was the first month since January in which new hires have been fewer than separations in the West region.  Overall, 2012 has been similar to 2011 in the relationship between separations and hires, however, for the West region during September 2012, there were 11,000 fewer hires in the region than separations, which is considerably less than September 2011's difference of +44,000. 

The second graph shows that the current trend is similar to that of last year with similar patterns in net hiring over layoffs and separations. New taking the year as a whole, hires are up from 2009 and 2010 levels, but the trend is largely flat from 2011 to 2012. 

While not indicative of a significant worsening in the labor market, this data does not show and substantial gains either. While layoffs have fallen off, so have new hires. 

Note: The JOLTS employment data is tied to the Establishment Survey which does not cover small business hiring and self-employed persons.The BLS recent made some significant revisions to employment data at year-end 2011. This analysis reflects the new revised data