Reading July 2011 JOLTS Tea Leaves: Employment Outlook Not Good

Jobs openings in the BLS Job Openings and Labor Turnover Survey (JOLTS) serves as a predictor of future jobs growth. In July 2011, the employment dynamics show no upward or downward pressures on employment.

The relevance of  JOLTS to future employment is obvious from the graphic below which clearly shows JOLTS Job Openings trends leading or coincident to private non-farm employment trends.

[click to enlarge]

So even though the data is two months old – JOLTS job opening trends are a valid forward employment indicator.  Graphing out YoY change brings a more ominous view of employment going forward.

The JOLTS job opening data is trending down (less good). This indicates, in the months to come, growth of non-farm jobs should continue to be weak. The separations rate declined in July – but so did the number of hires.

JOLTS is telling us there is no upward pressure on the labor market – and the trend lines are showing downward pressure.

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