The Great American Jobs Machine

J: President Reagan used to refer to employment growth in the US as the "Great American Jobs Machine," especially in contrast with the generally weak gains in European employment that occurred at about the same time as the US recovery from the deep recession that ran from July 1981 to November 1982. During that time period in the US, the net increase in nonfarm payroll jobs from December 1982 to December 1983 was 3,458,000 and the subsequent 12-month period saw a gain of 3,880,000 such jobs.

While the numbers are not so robust these days, we are still seeing big increases. In February 2017, there were 2,312,000 more nonfarm payroll jobs than there were one year earlier.

The Job Openings and Labor Turnover Report-February 2017 (the JOLTS report) released by the BLS on April 11, provides more detail on this growth. For the twelve months ended in February, there were 63.0 million hires into nonfarm payroll jobs that were new to the individuals hired. In the same twelve months, there were 60.6 million separations from such jobs. Thus, to get the net gain of 2,312,000 jobs, there were 123.6 million job "transactions"--hires or separations. That explains why being an HR person is always a good strategy for long-term employment security.

Another interesting statistic from the JOLTS report is that on February 28 there were 5,743,000 job openings in the US. However, there were 7,202,000 people counted as unemployed in the week including March 12, on a seasonally adjusted basis.

If all those jobs openings were filled by people who had been unemployed, then there would be only 1,459,000 unemployed people, assuming no people became newly unemployed before the April report. That would give us an unemployment rate of 0.9 percent. It's hypothetical, of course, but an interesting way to look at it.

There is not a labor market in any other country that is remotely so dynamic as that of the US. We are always seeing jobs being created and destroyed at rapid rates. That has been going on for over 150 years now and it should continue for years to come.

L: One problem that Jim has mentioned in speeches is that we have no national clearinghouse for available jobs. Many countries (usually geographically smaller, I admit) have centralized job listings so a person with a skill set that is not in demand where that person lives could find an area that did have a demand for that kind of job. Just another way that the US could help its workers.