US Labor Demand Soars, Or Sours

JOLTS is at it again. The most-watched piece, Job Openings, has been surging. Ostensibly an attempt to measure the demand for labor in the private economy, the BLS figures that US businesses are in the market for a whole lot of new workers. Given rising worries throughout the uncertainty of 2018, JOLTS JO has been used as a steady counterpoint.

This isn’t the first time. The level of Job Openings leaped in 2014, too. As economic uneasiness built through the end of that year and then accelerated (into a downturn, no less) in 2015, the same thing. The US economy was steady, booming even, as told by JO. By 2016, instead, it became clear something was amiss.

The BLS, however, holds no monopoly over statistics about job openings. The Conference Board produces a different set based solely upon online Help Wanted ads (HWOL). As with JOLTS, this alternate data proposes to measure the demand for labor. Only, around 2015 this other series encountered difficulties with Craigslist:

Because the online listing site charged nothing for ads including Help Wanted ads (outside of New York and LA metro areas), it grew to become the largest source of online employment listings. It began to charge for listings in other metro areas as soon as 2007 and 2008, expanding those charges to a wider variety of cities in 2012, 2013, 2014, and 2015. For some metro areas, the fees were almost doubled at the end of 2015.

As a result, the HWOL series slowed during 2015 and then collapsed to begin 2016 – according to them, not for macro conditions. Over the last two years, the group has reworked HWOL into what they call an experimental index. It still shows the flagging rate in online Help Wanted ads during that last downturn, but not nearly to the same extent after having accounted for Craigslist dynamics.

Difficulties aside, the new index performs generally the same as the old one; as in, it very much disagrees with the BLS’s version on these last two upswings. Both of them.

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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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