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 significantly improved relative to last month.
Analyst Opinion of JOLTS Data
The BLS stated:
On the last business day of December, the job openings level reached a series high of 7.3 million. The job openings rate was 4.7 percent. The number of job openings edged up for total private (+198,000) and was little changed for government. Job openings increased in a number of industries, with the largest increases in construction (+88,000), accommodation and food services (+84,000), and health care and social assistance (+79,000). The job openings level decreased in a number of industries, with the largest decreases in nondurable goods manufacturing (-37,000), federal government (-32,000), and real estate and rental and leasing (-31,000). Job openings was little changed in all four regions.
The unadjusted data analysis shows rate of growth is well above the average seen in 2018. With this JOLTS, it is predicting improvement in the employment situation we have seen over the past year.
There were no market expectations from Econoday.
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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