Tuesday, October 09, 2012

Why are job vacancies still high? Because we're leaving jobs very quickly

Employment stopped growing quickly some time ago...

Yet job vacancies remain high:

Today the RBA's Philip Lowe came up with an explanation:

"There is some evidence that the changes taking place have led to a higher rate of job turnover in recent times than has been the case for the past two decades. The number of people who left a job over the year to February 2012, as a share of those employed some time during the year, was the highest in two decades, with fairly high rates of both voluntary and involuntary separations.

This high rate of turnover, with relatively modest aggregate employment growth, is consistent with a lot of new job opportunities opening up in various parts of the economy and, at the same time, other jobs ceasing to exist. Another indication of this is that the official measure of job vacancies has remained relatively high, yet employment growth has been relatively subdued."

There's much, much more in the speech -- including this unsettling graph:

The Labour Market and Structural Change

Related Posts

. Switching jobs. The turbulence beneath the smooth job market surface

. It's getting easier to find a job in NSW, harder in Victoria

. All of employment growth is accounted for by Australians over 55


Marek said...

A lot of my mates are shopping around for better jobs, a lot of them seem to be getting better paid non advertised positions

Magpie said...

There is a simpler explanation: bosses are demanding more skills and experience for the same pay.

There is research in the US documenting this effect there.

Occam's razor used to be considered a good rule of thumb.

derrida derider said...

Increasing labour market flows are a leading indicator of a strong rise in employment - and I don't think we see many other signs of that (though of course we could get a pleasant surprise).

Conversely in a slowdown the first thing that happens is that both vacancies and quits fall as employers hoard labour and employees get fearful. That usually happens well before the stocks (ie employment or unemployment rates) change much.

That's why short-term forecasts usually pay much more attention to FLOWS rather than STOCKS generally.

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