JOLTS Revisions: Much Better Reopening, But Why Didn’t It Last?

According to newly revised BLS benchmarks, the labor market might have been a little bit worse than previously thought during the worst of last year’s contraction. Coming out of it, the initial rebound, at least, seems to have been substantially better – either due to government checks or, more likely, American businesses in the initial reopening phase eager to get back up and running on a paying basis again.

The JOLTS labor series annual revisions took about 300,000 off the estimated level of Job Openings (JO), one way to figure demand for labor, in each March and April 2020. Instead of a bottom just less than a 5 million pace, the government now thinks it was more like 4.63 million. In terms of Hires (HI), the revision was less, removing only 100k for April.

On the way back out the depths, though, now the BLS calculates HI in May had been simply astronomical; whereas previous they’d put the hiring rate during that month at an impressive 7.2 million, way above records as the flood of reopening worked out to more work, the agency now believes that rate had instead been nearly 8.3 million; an explosive 1.1 million upward revision.

This overperformance on the company side remained for a few months toward the rest of the year in the new benchmarks, though becoming far, far less as 2020 wore on. While June’s HI rate was again a million better than previously figured, and in August still around 500,000 higher, by November the difference was less than 100,000 as the labor market cooled way too soon before it ever really got going.

Job Openings, by contrast, were revised slightly upward toward the end of last year which only brings up the same discrepancies that have plagued these two JOLTS series for several years now. According to JO, companies seem to be posting a lot more online ads for positions they don’t appear intent to fill; or, most likely, they are that much more difficult to fill.

In 2021, the latest update (including benchmarks) for January, the level of JO while better than previously thought are still less than the same month last year (this is also true of the unrelated Conference Board Help Wanted Online index, or HWOL).

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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