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JOLTS Jolts Jobs Report Cheerleaders, Implies Worst Job Growth Since September 2010
In the aftermath of last week's decidedly weak unemployment report (pre-spun to appear strong while ignoring the major drop in average weekly hours worked, which would have resulted in a massive drop in payrolls had total demand for labor stayed constant from March), many were looking for some confirmation, or denial, from today's Job Openings and Labor Turnover (JOLTS) survey which provides the labor breakdown by new job openings, hires, separations, quits and layoffs for the preceding month.
On the surface, the March JOLTS survey was a disappointment - analysts look at the report to see how the Job Openings trend is doing as an indication of labor demand (a decline from 3.899MM to 3.844MM, and down from a year ago, or 3.848MM, as well). More importantly, New Hired tumbled to the lowest since December, printing at 4.259MM, down from 4.451MM in February, and down from 4.435MM a year earlier. On the exit side, workers indicates less leverage as well, with voluntary Quits, or worker-initiated departures, down 126K from 2.286MM to 2.160MM, while involuntary discharges, or terminations, spiked by 121K from 1.572MM to 1.693MM. As Stone McCarthy explains, this "hints at a less favorable environment for the labor market, especially when the increase in the number of layoffs (+121,000) is taken into consideration."
However, the biggest surprise from the JOLTS report is not in any of the standalone series, but in the time progression of the Net Turnovers number, which is simply the total new hires less total separations. Historically, the Net Turnover number tracks the total monthly nonfarm payroll change (establishment survey) on a almost tick for tick basis. Not this time. In fact as the chart below showed, the upward revised March NFP number to 138K, which preceded the even more optimistic, and much cheered April print of 165K, which sent the S&P and the DJIA soaring to new all time highs on Friday, not only did not get a confirmation, but in fact the JOLTS survey for Net Turnovers - which came at only 46K in March compared to a revised 138K jobs added per the establishment survey - implied that the real NFP number in March should have tumbled to a level last seen in September of 2010!
Looking at only the difference between the monthly NFP change and the implied JOLTS monthly job change, we find only the third highest discrepancy since the Great financial crisis, as can be expected implying a far greater bullish upside bias reported by the BLS in the non-farm payroll data.
In fact, on a three monthly moving average, the "bullish bias" difference to NFP reported data is now only as big as it was just after the Lehman failure!
Of course, this data only looks back through March. It is quite possible that the April JOLTS data will be so strong, that it overwhelms the time series on both a monthly, and a moving average basis, promptly catches up to where it should be... Somewhere 150K higher than what the April payroll print of +165K suggested. Somehow, we doubt it.
Finally, and perhaps most disturbing (because the BLS' constant upward bias to data should not be news to anyone), is the updated Beveridge Curve chart showing openings vs unemployment. It very distinctly shows that the New Normal Beveridge Curve is nothing like what it was in the past, and that there is a structural shift in the amount of job openings to any given fixed unemployment rate, roughly 700,000-800,000 job openings more now than there should be, indicative of a major structural shift in the labor pool, and that there is a substantial deficit in highly qualified job applications for any given job opening, while everyone else languishes for weeks and weeks and weeks without a job (and collecting government benefits).
Some observations on this very curvy Beveridge curve from Stone McCarthy:
Greater structural unemployment suggests that NAIRU may be higher than previous notions of 5% or so, and the potential GDP trajectory could also be lower than previously thought. Recent updates to the FOMC forecast have kept the longer-run expectations for the unemployment rate at 5.2%-6.0%.
A number of Fed officials have indicated that the elevated unemployment rate is mostly an artifact of cyclical forces, but also that they are concerned that cyclical unemployment could turn into structural unemployment due to the extended periods of unemployment. This is a thesis with which we generally agree. Our sense is that NAIRU is probably now at 6% or a little higher, and that the potential GDP trajectory is probably around 2% rather that the 2-3/4% previously embraced by most.
Source: JOLTS and JOLTS supplement
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You have to be a Central Bankster or Central Planster politician to not know the real employment situation totaly sucks!
But the only thing that really matters is being able to say 'DOW again closed at all-time record highs' so the sheeple herd stays placated and charges a pizza and Red Box new release DVD.
DOW 36000. That is all people care about.
Fuck DOW 36,000 & fuck anyone who has been conned into thinking that they 'NEED A JOB'...
~~~
Anyone who thinks they need a job needs to first begin to wonder where that 'job' is coming from... If you can't answer that question then you DESERVE not to have a job & if you can answer that question you'll discover you don't need a job...
What frustrates me is that ZH is missing a very key component of this recovery. Companies aren't hiring and we know that. But there are job openings, and there is very little employee turnover with rising wages and rising hours worked. This tells a story of companies that are hoarding skilled labor. They're not firing anyone, but they can't find anyone skilled enough to fill the openings so they slap some overtime on the current skilled workers they have.
This is why the unemployment rate is being stubborn, and why people keep dropping out of the labor force. We have a shortage of skilled workers who are matched to jobs we need. Once people stop going to college for pointless majors "just because" college is the thing they've always been told to do, maybe this will start fixing itself.
I love this site and read it everyday but its insistence on making EVERYTHING look bearish no matter what, and its insistence on calling everything a "plunge" or a "surge" is getting frustrating. People will take you more seriously if you aren't so openly biased.
"I love this site and read it everyday but its insistence on making EVERYTHING look bearish no matter what, and its insistence on calling everything a "plunge" or a "surge" is getting frustrating."
Tyler promises to stop doing that when the MSM stops. Until then Tyler is just adding some counter weight to the constant hopium bias of the cheerleading MSM.
I'm sorry but putting a bearish bias on everything is just as bad as putting a 'hopium' bias on everything. I wasn't aware that you could take one lie, add in a totally opposite lie, and get the truth.
How about just reporting things for what they are? Is that really so much to ask for?
Everyone keep junking me, it just shows how ignorant you are. No one had any counter-argument for what I said, because what I said is (shocker!) true.
Apparently the people who read this site are getting just as bad as the MSM. I use facts, logic, and historical precedence to back up my arguments. The MSM uses fear and misinformation. That's exactly what ZH is starting to do more and more. I applaud them for their constant coverage of the 'underground' news that we can't get on yahoo.com but seriously, how can they keep a straight face while accusing the politicians of using fear for their own gain? They're doing the same thing.
This is a black hole.
http://gawker.com/tag/hello-from-the-underclass
fwiw....I don't know one person who is working extra hours to make up for positions that are open and not being filled. I know several who have lost their jobs due to company downsizing or company bankruptcy and can't find a comparable job. I DO know of one company that laid off a dozen people and just asks the other employees to work extra hours or weekends. It's not that they can't find anyone to fill the vacancies because no one is quaified, but it costs LESS in salary and benefits to have a smaller staff work extra and that savings goes right to company's bottom line.
You got junked because the employment report last week dropped .2 hours work which is suppose to be the equal to 788k layoffs.I'm working overtime but we had layoffs in Dec. and March,they sent R&D overseas so the countdown is on,a couple more years and I'm fucked.
But isn't everything bearish ? This country is spending a trillion a year we don't have,printing a trillion and all we are getting is 2% growth which is about 320 billion,really ?
"The state of having inconsistent thoughts, beliefs, or attitudes, esp. as relating to behavioral decisions and attitude change"... you don't have to live with your condition.
The unemployment rate is being stubborn? My 6 year old is stubborn. The unemployment rate is a lie. That lie has become part of the narrative that you just wrote.
Right! From the article commentary: "the real NFP number" - you mean to tell me, they're lying to us about the real number?! LOLOL
Or perhaps they are working their workers harder to avoid hiring new employees and the added regulatory cost of labor--Obamacare anyone?
Symptom... not the cause.
When you start out proclaiming "...this recovery" and end with a comment about ZH being "...openly biased," you become the poster-child of hypocrisy.
"We have a shortage of skilled workers who are matched to jobs we need."
How's that centralized government education system working out for ya?
Thank God we have common core on the way... that will fix everything.
" We have a shortage of skilled workers who are matched to jobs we need. Once people stop going to college for pointless majors "just because" college is the thing they've always been told to do, maybe this will start fixing itself."
Sounds like you're having a hard time finding skilled workers willing to work for third world wages. I've been to Bangalore, Silicon Valley of India according to T. Friedman. It's one large urban open sewer. I hope your vision of America fails.
"What frustrates me is that ZH is missing a very key component of this recovery. "
I strongly suggest that zerohedgers go to the Department of Labor website and look at the education profiles of the workers that will be needed in the near future and even today. The only skillled work that will grow is that dependent of a growing aging population becoming sick: Nurses, physicians, biomedical engineers, etc. all health care. Most of the growing occupations will not require even high school diploma, please go check. This is what they see coming, the key question is do we want that Country for our children? Because it is the Country that is coming, and I have no reason to doubt the accuracy of those predictions since politicians have not delved there as of yet.
Until next time,
Engineer
I recently retired. I have been called back to work several times in the last year. I can always find something to use the money for so I do it. The reason there aren't more young workers that have the skills they need is because almost all companies do not want to pay for the on-the-job training. No college or tech school can train someone for a particular job. OJT costs the company money, and in this economy they want that money to go to the bottom line or executive salaries. Hiring young inexperienced workers also carries a risk. Large companies are required to diversify their workforce. Some of those people they would be required to hire know from day one that they don't have to work and it will be very difficult to get rid of them. Sometimes the easy way out (or only feasible way) is to increase overtime or bring back some old geezers like me.
As for the ZH bias, remember they are owned by ABC and ABC is owned by Disney. Disney has enough happily ever after stuff so ZH has to provide balance. I kind of like their balancing act.
Exactly right,I'm a line maint tech,it takes at least 10 years to become a really good tech.I think on my shift the youngest is 40 and the rest of us are 50 or older.If you you bring in OTJ trainee you can count on at least a few hundred thousand dollars in mistakes and extra down time.
yes it is but remember the "real" banksters enjoy making money and in a market like this NOTHING would give them greater pleasure than to rip the hearts out of some helpless longs with an "unexpected" correction.....when "complacency" is at its highest.......they don't give a shit anymore about the illusion the market is going up....they can't get the sheep to jump in and big money is scared shitless........its the game and its in the final stages of big shark begins eating ALL the sharks......
Right - they'll make money up, and down. With bouts of deflation and inflation warring all around the globe, they'll either control more assets (deflationary depression), or control more power (inflate awaaaaaaaaaay the goobermints debts...) Oh yeah, there's collusion either way. Keep those EBT food cards charged up baby! They may not be able to 'eat cake!' (Marie-Thérèse), but they could possibly eat the catch of the day! At least for now. When the powder keg blows, or the house of cards falls down, all bets are off...that's where gold, silver, lead and other hard assets come in of course.
There are still plenty of people in complete denial or part of the head in the ass crowd (BlowHorn for example).
Mindless Zombies everywhere I look these days.
It's funny, I was just watching an old video from when the markets were crashing down and all the CNBC Blowhornists were all saying 'WOW no one coulda seen this coming, I've never seen anything like this before, it's a travesty! What's happening!'
Blah blah blah....they never see it coming, and when it does happen they're worthless anyway just women running around all frantic with the vapors. When this shitcastle crumbles again there will have been no warning and 'those in the know' will be completely useless, as always.
Here, good video, watch at the beginning the Blowhornists and what they're saying....they're baffled about how it took '5 years to get here, and we just lost it all in a week!' Sound familiar to anyone? BREAKING INEQUALITY - Why You Will Always Be Poor... - YouTube
WHAT?! Someone's cooking the data?!
Holy snarkoff Batman, what's next -- fixed markets?
The banksters get to eat breakfast at the bernanke printing presses every morning while the peasants get to eat inflationary dinner.
What a crappy economic model, its going to end in disaster.
It is called "growth". Going on for centuries.
Mean reversion can be.....mean.
Note also that a lower 'structural full employment rate' (remembering that the UNemployment rate is no longer a useful concept) is great for keeping wages low.
Question for the class: Are structurally AKA chronically lower wages a good thing, or a bad thing?
Depends on the meaning of 'or'.
In these monthly FRED/BLS reports, the two most significant pieces of statistics are:
A) Incomes
B) JOLTS.
The rest is really all subterfuge because as we know here at ZH, those numbers can be easily cooked.
But the above cannot......those 2 data points I show above are the most important, because they are the most transparent and most telling of the status of the "labor market".
You can't fudge what people collect in their check each week; those tax revenues are too important to the states.
You can't fudge JOLTS, because the data is (partially) derived from pay stub turnover, and the HR surveys that are filled out with each employee turnover (reason).
And guess what?
There *IS* no labor market.
Which is why the MSM doesn't report on these numbers.....only the ones that influence the fish investors and the HFTS to get us to DOW 99999999999999999999999999999999999999999999999999999999.99
Dow Jones up 63. S&P500 up 6.
Economy is just fine. What labor problems? What job shortage?
There's a sale on foodstamps - gotta go now!!
Who needs jobs? Can't we all just buy Financials, FB or APPL stocks on credit and suckle at the teat of the government? I mean, hasn't the great chair satan guaranteed that the 'money' will never end? Hasn't the government guaranteed that big financials will never fail? The rest of the world will fund us forever, and we can all retire on large yachts somewhere in the Caribbean. Jobs. Ha! Jobs are for losers who haven't figured out yet how to rape the rest through fiat manipulation.
SOOoo the 'official' #s are fudged..??!! O M G...!!
Fudge pot brownies with 'shrooms.
The caterpillar says "Helloooo..."
In future, I will be paying for my groceries with the pension promises made by my former employer and eating my iPhone for real.
Whoever this JOLTS guy is they are going to drone his ass.
no doubt - this data is in a clear downtrend unlike ADP, initial claims, etc.
Work Will Not Be Back To Normal
http://chartistfriendfrompittsburgh.blogspot.com/2013/05/work-will-not-be-back-to-normal.html
.
I turn on the T.V. and all I see are CRAZY PEOPLE.
My wife used to sit around and wonder if there were any normal people remaining. Suddenly we figured out we were not the normal people, and Snookie and The Situation were.
All you need to know about employment is the year 1979. That's the last time the workforce participation rate has been this low. Jimmy carter redux.
Keep in mind, grasshopper, that all the stock market is in the short run is a transfer of claims on wealth.
re: 165k jobs #
lets see...according to my blue collar, no Phd math, 165k minus the 190k+ CES birth/death model hocus pocus bullshit = a negative number.
Where did I go wrong?
Oh I get it, I'm not an Ivy League economist, my bad.
Well said.....
You don't get classified as unemployed if you are coming into the workforce, never had a job, and can't find one.
I like the positive Benghazi numbers better.
Very clever Tyler.
How come all the Obamacare and Obamataxes are not generating any jobs?