JOLTS in October 2011 Continues to Point to Continuing Jobs Growth

Jobs openings in the BLS Job Openings and Labor Turnover Survey (JOLTS) serves as a predictor of future jobs growth. In October 2011, the JOLTS trends continue to 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 October while the recent BLS jobs data is November – 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.

Looking at rate of change – JOLTS Job Openings is remaining is a channel between 10% and 20% year-over-year growth – and has no obvious trend up or down.  This indicates the rate of job growth we are seeing today should continue into the months to come.

Both the separations rate and the hire rate declined in October. 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 both the separations rate and the hire rate ratios remained approximately unchanged (suggesting little overall effect from these declines).

Please note that Econintersect has not been able to 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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4 replies on “JOLTS in October 2011 Continues to Point to Continuing Jobs Growth”

  1. Steven, we think that [email protected] pointed out to U.S. that “voluntary quits” are now trending up. And, that “mass layoffs” and other “terminations” are declining.

    What that might mean is that some of U.S. feel that now IS the time to give up (Y)our day jobs. And, if you do that, you probably will not be fired or let go – now.

    So, if it tis now safe to shift jobs, what we might also be seeing is an increase in job openings, to fill the positions that quit.

    Not new positions.

    Two points:

    FIRST, if it tis true that the longer you are out of work, the less likely you will find work, then it is much easier for those WITH jobs to find and take new ones.

    SECOND, what we may be seeing is “musical chairs”.

    However, with the long term unemployed not even in the same room!
    And, with there being no fewer chairs; and no more people able – and even more important, not less able – to find a chair to sit in.

    And, if THAT is true…
    we are simply going no where faster than we were before.

  2. JGB, i only focus on the portion of the JOLTS report that i can correlate historically to REAL jobs growth or contraction.

    However, separations includes voluntary and non-voluntary terminations. If there was a growing churning effect (people quitting and going to a new job), you would see an INCREASE in both hires and separations – and in October, we see a decline in both. I do agree that involuntary terminations are falling while voluntary terminations are rising – and you would think this is a positive sign for the jobs market.

    JOLTS is a difficult report to interpret, and i have played and played with its data – to develop historical relationships. i can find no good relationships with hires or separations to use a tea leaves to interpret the market.


  3. Observed you:
    “If there was a growing churning effect (people quitting and going to a new job), you would see an INCREASE in both hires and separations – and in October, we see a decline in both.”

    Conceded we:
    Well…, maybe…, normally that would be (is) true.

    However, if the increase in quits was equal to the decline in involuntary firings; and if the new hires were primarily quits, and equal to a decline in the hiring of anyone else but quits; then what looks to U.S. as “no change”, is, in fact, a major change.

    What we fear might be true is that what we WANT to see – more people employed; might actually not only not be occurring, but worse, all the “movement” we think we see is lateral.

    The Good News could be that they are seeking and taking better paying jobs, now that they think they can. Or, that they are exiting, stage left, very bad job environments – that they were afraid to leave before.

    The Bad News might be that there may not be anyone as experienced or qualified as they were to fill the jobs they left. Or, that the work environment was SO bad, that no body in their Far Right mind will be willing to take it.

    Oh, and Steven, since we drink every afternoon one small pot of black tea, and one of green tea, after one of Starbucks Sumatra coffee in the mourning, we have lots of tea leaves to share wid you.

    Oh, and in the WA Leg, twas well known that if Boeing publicly opposed you, that might be why your Bill died. However, if Boeing said they absolutely “know nothink!” (like Sergeant Schultz in Hogan’s Heroes), then you absolutely DID know that Boeing had killed it.

    So, Steven, the fact that YOU cannot see what we suspect is The Case…
    only goes to prove to U.S. that it, absolutely, must be true:)

    MOG, but are U fun to argue with – before Christmas.

  4. JGB,
    ah, you should know I am the eternal pessimist – am not looking or not looking for employment growth. i am not a pumper of the economy or investments – just looking for the elusive truth (something we never seem to reach).

    i am a bear on employment because of the multiple headwinds of boomers, import favoritism, and productivity (computerization). nothing good or lasting is around the corner.

    realistically, we are both discussing an imaginary world – because this data was produced by algorithm – and the unadjusted data showed a drop in jobs (no or little jobs growth in the second half of any year).

    we need to learn to dance with this evil algorthm.

    i would lay off the caffeine, and stay with a nice subtle camomile. 🙂 but as you say, yah gotta read tea leaves.

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