Written by Steven Hansen
The BLS Job Openings and Labor Turnover Survey (JOLTS) can be used as a predictor of future jobs growth, and the predictive elements show that the year-over-year growth rate of unadjusted private non-farm job openings improved relative to last month.
Analyst Opinion of JOLTS Data
The BLS stated:
On the last business day of October, the job openings level was little changed at 7.1 million. The job openings rate was 4.5 percent in October. The number of job openings was little changed for total private and for government. Job openings increased in information (+45,000), real estate and rental and leasing (+38,000), educational services (+20,000), and state and local government education (+17,000). The number of job openings decreased in state and local government, excluding education (-38,000) and transportation, warehousing, and utilities (-33,000). Job openings were little changed in all four regions.
The unadjusted data analysis shows rate of growth is about average seen since 2010 – and about average values seen in 2018. With this JOLTS, itis predicting little change in the employment situation we have seen this year.
Market expectations from Econoday was 6.995 M to 7.200 M (consensus 7.000 M) versus actual of 7.1 million.
The graphs below uses year-over year growth of JOLTS Job Openings – both the level of openings and rate of openings.
Last month’s graphs
This Month’s Graphs
There is a skills mismatch in the U.S. workforce – as job openings are higher than number of unemployed people.
The JOLTS Unadjusted Private hires rate (percent of hires compared to size of workforce) and the separations rate (percent of separations compared to size of workforce – separations are the workforce which quit or was laid off).
Unadjusted Hires (blue line) and Unadjusted Separation Levels (red line) – Non-Farm Private
Please note that Econintersect has not been able use the hire rate or the separation rate (or a combination thereof) to help in understanding future jobs growth. A Philly Fed study agrees with Econintersect’s assessment. JOLTS is issued a month later than the jobs data – and correlates against one month old data.
For information, the Econintersect Employment Index and the Conference Board’s Employment Index:
Caveats on the Use of JOLTS
This data series historically is very noisy which likely is a result of data gathering issues and/or seasonal adjustments. Therefore this series must be trended to provide any understanding of the dynamics. One of two months of good or bad data are not predictive.
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