Normally I pass on a deep analysis of the BLS Job Opening and Labor Turnover (JOLTS) data as it is over 30 days out of sync with the jobs report. But the BLS jobs data for both December and January (analysis here and here) were disturbingly mediocre – I am looking for enlightenment.
The survey data from the ISM and Federal Reserve surveys insist that business is hiring. ADP jobs data says business is hiring. The Department of Labor’s weekly initial unemployment claims are at a level the historically jobs growth should be in the 150,000 to 200,000 range – yet the BLS jobs growth is running approximately half that value.
There is evidence today that the economy is picking up steam – yet unlike earlier this year when the economy seemed struggling and jobs growth was high (relatively), the economic growth now seems higher while the jobs growth is low.
JOLTS is a study of job creation and death. The headlines of the December 2010 report released today:
There were 3.1 million job openings on the last business day of December, the U.S. Bureau of Labor Statistics reported today. The job openings rate was essentially unchanged over the month at 2.3 percent. Both the hires rate and the separations rate were unchanged at 3.2 percent each in December. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector by industry and by geographic region.
It should come as no surprise that the BLS believes hires and separations are nearly equal (chart 2 above) as their reported jobs growth is small. It is hard to argue a jobs recovery is occurring based on this chart.
The number of job openings in December2010 (not seasonally adjusted) increased from 12 months earlier for total nonfarm and total private. The level was little changed over the year for government. Over the year, the job openings level increased in seven industries, decreased in one industry, and was essentially unchanged in the remaining industries. The job openings level increased in the Midwest and West regions.
Job openings are unfilled positions – usually caused by a skill set miss-match with the workforce in the location that skill-set is needed. Job openings have improved YoY – but notice the difference between the seasonally adjusted chart 1 above and the unadjusted chart above for job openings. Chart 1 suggests we are in better shape today then December 2008, while the unadjusted chart says the opposite.
The issue is not seasonal adjustment methodology – but the method used to calculate the jobs opening rate on Chart 1.
The job openings rate is computed by dividing the number of job openings by the sum of employment and job openings and multiplying that quotient by 100.
If the employment base is smaller, and the number of openings similar – the smaller employment base clouds whether there is an improvement. A fairer graph to understand the jobs situation is chart 3 below which was not included in the press release.
Still the implication is that job hires and separations are balanced – and the growth is in jobs openings. Based on the terrible January 2011 BLS jobs report, I would expect little improvement in the January 2011 JOLTS.