The Great Recession may be over, but try telling that to the millions of Americans who are unemployed and now see even stiffer competition for job openings.
Labor Department data released Tuesday showed that in November there were roughly 6.4 unemployed workers for each available job–a record high. The figure is up from 6.1 in October and 1.7 in December 2007, when the recession officially began.
The department’s latest release also showed that job openings fell to 2.42 million in November from 2.57 million the month before. By contrast, openings peaked in June 2007 at 4.8 million.
So even as layoffs are slowing, hiring is not gaining steam. In fact, job openings have declined steadily for more than two years.
The job openings report followed a government release last Friday that showed payroll employment declined 85,000 in December. This was markedly better than declines of 139,000 in September and 127,000 in October but a setback from an increase of 4,000 in November.
The unemployment rate in December was 10 percent–unchanged from November.
Reductions in the jobless rate typically lag economic growth, so the latest numbers are not a big surprise. But they almost certainly will prompt calls for additional stimulus action in Washington.
The more pressing need, however, is for greater fiscal clarity in the nation’s capital. In the face of large U.S. deficits and speculation about significant tax increases on the horizon, many businesses conclude that additional hiring and investment is unwise.
This stance by employers is understandable yet runs the risk of being self-defeating. Without new hiring, the economy will be lucky to eke out a weak recovery–an unwelcome prospect for all businesses.
Most economists say the most significant positive news in recent months is the steady drop in the number of layoffs. The trend–which has been apparent since midyear–indicates that employers no longer think they need to slash costs to stay afloat.
What’s needed now is a willingness to invest in the future.
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