Here We Go Again: Following Big Payroll Miss It’s The Level Of Hiring, Not Job Openings

Because it was outdated by the publication of the most recent payroll data for April 2021, the follow-up updated JOLTS estimates for March don’t end up having quite the same impact. In one sense, that’s unfortunate because they are once again providing another useful demonstration of the limitations over decoding the employment situation.

Job Openings (JO), for one.

Before getting to them, the various underlying data including general turnover via layoffs and quits does go back and undercut to some extent the preliminary monster Establishment Survey figure for two months ago. The latter was revised down to less than 800,000, and now the JOLTS “reconciliation” suggests that, as we’d expected, the original CES estimate was indeed more of an outlier (you can read about the methodology behind this here).

Hiring (HI) came in at 6.01 million for March which was up by a few hundred thousand but curiously not really that much, certainly nowhere near what that huge payroll figure had implied. Instead, what happened was layoffs and discharges (1.48mm) declined more than the increase in the number of workers voluntarily quitting (3.51mm). The difference between HI and the other two left a large positive net turnover gain of 1.02mm.

Applying the constant structural factor between this and the numerical monthly changes in payrolls (-300k), JOLTS here align much better with lower revised payrolls at 770,000 rather than the originally-rated 916,000 which had gotten the stimulus-rebound-is-massive-fire fired up.

We’ll have to wait until next month for the JOLTS estimates in April to see if they drop downward like the huge “miss” in payrolls.

It’s the HI part rather than JO’s which should get everyone’s attention but never does. Companies just aren’t going gangbusters adding new employees (or rehiring former) despite the idea the labor market is somehow inflationary red hot. At 6.01mm in March, again the “good” month, this is seriously underwhelming hires activity:

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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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