Job openings and recession

Total non farm job openings, JTSJOR, % change year on year, measured quarterly reported annually, for the period January, 2002 through Q1 2013

The United States has what is called a consumer driven economy; in other words spending by consumers provides a significant component of GDP. In America’s case consumer spending accounts for over 70% of GDP and here is a problem: if people aren’t working they aren’t spending. Unemployment in America remains at record highs while job creation lags overall, in some sectors such as manufacturing the rate is effectively zero.

The chart above shows total non farm job openings (JTSJOR, black line, % change year on year, measured quarterly reported annually) for the period January, 2002 through Q1 2013. The period was chosen to include two recessions. As the economy recovered from the Early 2000s recession (which ended November 1st, 2001) we can see jobs creation increased steadily, peaking out in July, 2004. From this point jobs creation steadily declined until the US economy entered The Great Recession in December 2007. After the Great Recession ended in June, 2009 once again the economy created jobs steadily, hitting a peak in July, 2010. And from there jobs creation has trended steadily down, is recession far off?

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