Tuesday, March 26, 2013

Quits and layoffs outnumber new hires in January

The number of new hires in the U.S. West, which includes Colorado, rose 2.1 percent year over year from January 2012 to January 2013. Layoffs also rose, rising 18.6 percent during the same period.

According to the latest Job Openings and Labor Turnover report (JOLTS) for January 2013, released last week by the U.S. Bureau of Labor Statistics, the West's increase in new hires of 2.1 percent percent was larger than the nation overall which showed a smaller increase of  1.5 percent, when compared year over year. During the same period, layoffs fell 6.6 percent in the nation overall, compared to the West's increase of 18.6 percent.

January's year-over-year increase in new hires was the fourth year-over-year increase in a row for new hires in the West region. 

The first graph shows the year-over-year change in new hires and in layoffs in the U.S. West region. There is no solid trend in either layoffs or new hires. 

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. January 2012 was the second month in a row in which new hires have been smaller than separations in the West region. This typically happens during December and January in the West region in recent years. Over the past two years, though, the general trend has been one in which new hires outnumber separations and layoffs. 

Overall, 2012 was rather similar to 2011 in this measure. The number of new separations in January, however, was the highest number seen since 2009. The number of new hires in January was pretty typical for what we've seen in recent years. The larger trend suggests that net jobs are in fact being added to the economy (the blue line is over the purple bar most months lately) but little change in the rate of improvement has been seen since 2011. 

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