April 2017 JOLTS Job Openings Rate Shows Improvement

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 are now in expansion year-over-year.

Analyst Opinion of JOLTS Data

JOLTS had been showing little year-over-year job openings growth. Historically, this indicates weaker employment growth. This month both employment and JOLTS job openings year-over-year growth improved. This aligns with Econintersect's Employment Indexwhich is forecasting improving employment gains.

Market expectations from Bloomberg / Econoday was 5.700 M to 5.765 M (consensus 5.725 M) versus actual of 6 million.

• the number of unadjusted PRIVATE jobs openings - which is the most predictive of future employment growth of the JOLTS elements - shows the year-over-year growth improved, but still is well below the levels seen in 2010 through 2015. The year-over-year growth of the unadjusted non-farm private jobs opening rate (percent of job openings compared to size of workforce) likewise shows improvement.
• The graphs below look at the year-over-year rate of growth for job opening levels and rate.

last month's graph:

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this month's graph:

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The relevance of JOLTS to future employment is obvious from the graphic below which shows JOLTS Job Openings leading or coincident to private non-farm employment. JOLTS job openings are a good predictor of jobs growth turning points - and have similar trend lines..

The graph below uses year-over year growth comparisons of non-seasonally adjusted non-farm private BLS data versus JOLTS Job Openings - and then compare trend lines.

Year-over-Year Change - Unadjusted Non-Farm Private Jobs Openings from JOLTS (blue line, left axis) compared to Unadjusted BLS Non-farm Private (red line, right axis)

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• 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

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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:

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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.