Not A Bad JOLTS Report for September 2011

Jobs openings in the BLS Job Openings and Labor Turnover Survey (JOLTS) serves as a predictor of future jobs growth. In September 2011, the employment dynamics show some upward 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.  

So even though the JOLTS data is for September while the recent BLS jobs data is October – JOLTS job opening trends are a valid forward employment indicator.  JOLTS data is saying the current growth trend of private sector employment should continue in the coming months.

Graphing YoY change confirms a a stable rate of employment growth going forward.

The JOLTS job opening data was trending down (less good rate of growth), but in September improved to 23% year-over-year (from 7% in August).  The less good trend line is broken (if you want to trust one month of improving data) and the one month improvement  is substantial.  There hasn’t been an up move this large in the past 12 months.  Optimistically, this indicates growth of non-farm jobs should not weaken in the coming months.

The separations rate and the hire rate grew September – but remain in balance.  The separation rate is the percent of workforce which quit or was laid off. Likewise, the hire rate is the percent of the workforce hired.  Remember these are seasonally adjusted numbers – and in reality in September there were really no jobs gained even though the seasonally adjusted hires increased.

Please note that Econintersect cannot correlate the hire rate or the separation rate to jobs growth.  However, increasing JOLTS Job Openings data is telling us there is some upward pressure on the labor market.

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