Number of Job Openings Falling Dramatically

-edited

The number of Job Openings is down since the beginning of the year. Hires are up

The BLS released its report on Job Openings and Labor Turnover (JOLTs) for September on November 5. The release is for the nonfarm sector.

The above chart shows hires vs openings.

Three Key Points

  1. Since January, openings are down from 7.625 million to 7.024 million, a net of -601,000 total.
  2. Since January, openings are down 7.88%
  3. Since January, hires are up from 5.829 million to 5.934 million per month.
  4. Over the 12 months ending in September, hires totaled 69.9 million and separations totaled 67.4 million, yielding a net employment gain of 2.5 million.

Point number 4 is from the JOLTs report.

All Nonfarm Employees

Employment Level

BLS Benchmark Revisions

Wait a second. What about Benchmark Revisions?

"Preliminary benchmark revisions are calculated only for the month of March 2019 for the major industry sectors in table 1. The existing employment series are not updated with the release of the preliminary benchmark estimate. The data for all CES series will be updated when the final benchmark revision is issued."

The final benchmark revision is not yet posted so 501,000 jobs are not reflected in the previous charts.

Nonetheless, this is clearly close enough for government work.

What Does This Mean?

The base numbers are off by 501,000 assuming the benchmark revision is accurate. The discrepancy between JOLTs and jobs is another 258,000.

Expect still more revisions, especially towards the top of economic cycles.

With more revisions coming, the question "What does this mean?" is best answered by this reply:

We cannot possibly know, because we don't even know what the numbers really are.

I especially am wary of alleged job openings, confident that they are boosted by tactical methods to secure more h1b visas.

However, due to Soaring Unit Labor Costs and Declining Productivity, it makes sense for the number of opening to decline, even if we don't know from what level.

Also note that the Decline in Profit Margins and Investment Suggests Recession Due Now.

This too supports a decline in openings.

If you have additional ideas, please comment.

Mike "Mish" Shedlock

Comments (21)
No. 1-8
Harry-Ireland
Harry-Ireland

So shipping is down, PMI is down, hiring is down. It's here, people. The expansion has ended and we're headed to Slogville. I just finished reading a ZH article about the use of non-GAAP metrics in accounting, which seems to be the new norm. Oh my, this is going to be an interesting year ahead of us, in a LOT of ways.

Country Bob
Country Bob

There is a severe shortage of skilled workers (both "college skills" like math and engineering, as well as technical skills like welding or machine work). If you have these skills, you can get several job offers anytime you want.

There is an abundance of unskilled labor (English majors, political science, gender studies, journalism, etc etc) -- and the country already has as many Starbucks as it can handle.

Higher minimum wages mean these unskilled workers will get marginalized -- forced to be part time in the short term, and replaced by automation (financed cheap thanks to the Fed!) in the medium term.

Since the BLS numbers just count the total, and pretend a barista pays the same as an experienced lathe worker, the BLS statistics are going to be very very misleading.

Casual_Observer
Casual_Observer

There are never as many openings as advertised. A lot of double counting goes on. There is also no shortage of skilled labor. There are plenty of underemployed citizens with engineering and science degrees. In fact most of them are older and still underemployed and cant get hired because of their age. They told their children not to go into these fields cause jobs were being offshored and outsourced to cheaper workers with h1b and other visas who are less qualified but just cheaper. The labor market never recovered from the financial crisis as that was a fake bubble that employed a lot of engineering talent as quants. Traditionally these people would have worked in more productive fields but the risk reward ratio is much better on wall street. The talent shortage issue has always been a false narrative created by the very companies lobbying for h1b and other Visa programs for CHEAPER labor.

Realist
Realist

Where I live, there has been a big demand for skilled labour for many years and a big shortage of skilled labour. There are help wanted and now hiring signs everywhere as businesses simply cannot fill all the job openings they have.

I suspect the same is true in the US. Perhaps the JOLT numbers overstate things a little. Perhaps the unemployment and job numbers are a little off. But suggesting that businesses deliberately post openings they have no intention of filling, because of H1b games, is the main reason to distrust the JOLT numbers, makes little sense to me. I doubt if this would amount to much of the JOLT numbers overall.

I can understand that job openings are falling a bit in the most recent reports. Growth has been slowing, and I suspect it will continue to slow over the next few years. Slogflation should continue and JOLT numbers should drop a little as time goes by.

Casual_Observer
Casual_Observer

By the way the other reason openings are falling dramatically is nonrenewal if H1B visas by the government. Employers are giving up on.hiring H1Bs and more of them are getting deported every month. The government is making the visa holder prove they have special skills compared to the US citizen or green card holder and in many cases finding that a US citizen or greencsrd holder can do the job just as well if not better at the same pay. Corporations are no longer even attempting to hire h1b Visa holders as they get denied their h1 renewal and have 90 days to find a job or leave the country. I've seen two cases of this personally of interviewees where I work. Increasingly companies have approached citizens and green card holders and this is also driving up wages for the tech industry while productivity I'd essentially the same. The next crop of engineering grads who are US citizens will have no trouble finding jobs come 2020.

Six000mileyear
Six000mileyear

The actual number of opening is probably lower since 2 to 4 recruiters post ads for the same position.

numike
numike

The Inflation Gap: A new analysis indicates that rising prices have been quietly taxing low-income families more heavily than rich ones. https://www.theatlantic.com/ideas/archive/2019/11/income-inequality-getting-worse/601414/

Greenmountain
Greenmountain

And last night on '60 Minutes' Jamie Dimon was very bullish. It is all about the consumer - represents 70% of GDP and they are spending and that is good for the country. Interesting to look at consumer debt. Is it rising with all this spending?