Punch line: The jobs numbers (job growth and unemployment rate) that create so much anticipation from the business press …. do not give a clear picture of the labor market’s health.
A better understanding requires an examination of hires and separations, or what the Bureau of Labor Statistics calls Job Openings and Labor Turnover Survey (JOLTS) data.
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Excerpted from WSJ: Why the Job Market Feels So Dismal, May 16, 2011
At any point in the business cycle, even during a recession, American firms still hire a huge number of workers.
That’s because most of the action in the labor market reflects “churn,” the continual process of replacing workers, not net expansion or contraction of employment.
The lowest number hired in any month of the current recession was 3.6 million workers. Even during the dismal year of 2009 there were more than 45 million hires.
Bear in mind that the U.S. labor force has more than 150 million workers or job seekers.
In a typical year, about one-third or more of the work force turns over, leaving their old jobs to take new ones.
When the labor market creates 200,000 jobs, it is because five million are hired and 4.8 million are separated, not because there were 200,000 hires and no job losses.
When we’re talking about numbers as large as five million, the net of 200,000 is small and may reflect minor, month-to-month variations in the number of hires or separations.
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The Homa Files 
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