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Jenny Pazar fills out a form as she looks for a job at a job fair Dec. 2, 2011 in Portland.
Great post from Ben Casselman at the Wall Street Journal's Real Time Economics blog. It's all about "churn," the phenomenon of people leaving jobs for new jobs, and new hires coming in to fill the jobs that were left behind. A healthy level of churn is a sign of a healthy economy. And obviously, for the past few years, churn in our sickly economy has been unhealthy.
That appears to be slowly changing, which is a positive indication:
Churn is a big deal. A new paper by Edward Lazear of Stanford and James Spletzer of the Bureau of Labor Statistics finds that during the recent recession, 80% of the drop in hiring was due to low levels of churn, rather than reduced job creation. The authors estimate reduced churn shaved two-fifths of a percentage point off GDP for the duration of the recession.
Quitting, of course, makes up just one half of churn. [My emphasis] Companies also have to be willing to fill those open positions. That’s happening too, but slowly. Companies hired a seasonally adjusted 4.4 million workers in February, up 3.4% from January and 7.2% from a year earlier, according to the Department of Labor....Job openings are rising faster than actual hires, which could suggest companies are dragging their feet on filling open positions.