Where Is The US Labor Market Heading?

Tyler Durden's picture

When will the U.S. labor market start to accelerate?  That is the single most critical question for global capital markets, for it speaks directly to both economic growth and Federal Reserve monetary policy.  But, as ConvergEx's Nick Colas notes, just as important, however, is the question "Where do people actually want to work?"

Via ConvergEx's Nick Colas,

In today’s note we address both topics with a range of Google Trends analysis, looking at what both employers and prospective employees plug into the ubiquitous online search engine.  Key conclusions: there is no evidence of any faster pace of hiring, and the trend of hiring part time labor over full time is both strong (a 3:1 ratio) and accelerating.  As far as where online interest in available jobs runs deepest, Google outpaces Facebook and Apple by over 2:1, but interest in working at Twitter just surpassed searches for “Work at Microsoft”.  Stock markets clearly guide how a society allocates its intellectual capital, perhaps more than historical experience would indicate.

The good times in U.S. equities – and many other global stock markets - are undeniable, but it will be time to worry again soon enough.  Rallies – such as the one we’re seeing at the moment – create future obligations.  In this case, the +23% return for 2013, plus whatever we tack on between now and the end of the year, is essentially a promise of good news to come.  Markets discount the prevailing view for growth in the economy and corporate earnings.  And right now, the market weatherman is calling for sunny skies and fair weather for 2014.

The linchpin issue for global stock returns in 2014 centers on one group of people: the 11.3 million unemployed workers in the United States.  That isn’t to dismiss those suffering from unemployment in Europe, for example, or elsewhere in the world.  That 4.5% of the U.S. adult non-institutionalized population does, however play a critical role in the future returns for stocks globally.  Here is why:

U.S. labor markets have been stuck in first gear since 2011, generating an average of only 170-180,000 jobs over the past 12 months.  After natural population growth (100,000/month) that means only 70-80,000 jobs added, or 0.05% of the population.


The Federal Reserve has tried to juice the economy with Quantitative Easing, pushing capital into the financial system by buying Treasury and mortgage backed bonds.  That has kept interest rates low, spurred the purchase of autos and homes, and helped give the U.S. the limited employment growth we mentioned above.


The ebbs and flows of the Fed’s commentary regarding QE – its ongoing duration and amount – have become heavily correlated with global equity returns.  You don’t have to look any further than the June Fed press conference or the last FOMC meeting to prove that.  Chatter about “Tapering” the QE program causes a pullback, while confidence that it will continue lifts risk assets higher.  I am sure you can find academics or market watchers who will tell you this is just ‘Correlation’ and not ‘causation’.  Feel free to listen to them, but don’t invest with them.  Ever.


Given the anemic October employment report, the recent government shutdown, and concerns over the U.S. consumer, it seems unlikely the Federal Reserve will reduce its bond buying until 2014.  That leaves stocks to rally into the end of the year.  Easy peasy, right?


But then what?  The U.S. economy and public companies will have to deliver on the implicit promise of record high stock prices with a combination of faster economic growth and better earnings.  The connective tissue between those aspirations is incremental domestic job growth.


Can’t the Fed just keep lifting stocks higher with more QE, regardless of where the U.S. economy ends up?  They can try, but there has been enough reporting on the opinions of the members of the Federal Open Market Committee for us to know that the Fed is growing concerned over the chance for a bubble in risk assets, including stocks.  The world gives the U.S. a lot of collective slack because of its reserve currency status, but everything has a limit.  As the Fed approaches a $4 trillion balance sheet ($3.8 trillion as of October 13, or 24% of GDP), policymakers know they are closer to the end of QE than the beginning.


That might all sound like bad news – QE is coming to an end, watch out below! – but it also makes U.S. stocks essentially a one-decision asset class.  Job growth here simply has to get better.  Maybe not today, maybe not tomorrow, but soon, and for the rest of our lives (spurious Casablanca quote there).

With that in mind, we turned to Google’s Trends product to give us a sense of where the U.S. labor market is heading.  This free service allows you to see how many people have searched for a given phrase back to 2005 and also compare those search tallies with other phrases.  With a global search market share of 67%, Google is as clear a window onto the soul of society as you will likely ever find.  And, therefore, a good window into the soul of employer and employee alike.

Here’s what we found:

Search terms: “Hire workers” and “Fire workers”.  Figuring that employers would search terms like “Hire” and “Fire” more than workers, we started with these simply keywords.  More “Hires”
than “Fires” entered into the Google search box would be a good sign of hiring to come.


The Trends data supports that the U.S. jobs market is improving – “Hire workers” gets more searches than “Fire workers” and has since the beginning of 2011.  The two still move closely together, however, indicating that there is little momentum in American labor markets.


Search terms: “Hiring part time” and “Hiring full time”.  As of the most recent Jobs Report, 7.9 million Americans are stuck working part time when they would prefer to have full time employment.  Department of Labor statistics show that the increasing reason for this “Part time recovery” is that these individuals could only find part time work, rather than being put on a part time schedule by their employer due to slack demand.


The Google Trends data shows the magnitude of the problem: searches for the phrase “Hiring part time” outnumber “Hiring full time” by 3:1.  Google Trends allows you to see which U.S. states have the greatest number of searches for each term.  The best states for “Full time hiring”: Texas, Missouri, North Carolina, and Georgia.  “Hiring part time” is popular in South Carolina, Kentucky, and Alabama.


Simply put, there is a lot more interest on the part of employers to advertise part time jobs than full time employment, and the gap between the two is growing.  Part time employment may serve to reduce the unemployment rate, but it will do less to improve consumer spending or confidence.


Search term: “Jobs for seniors”.  If you want to see growth in the U.S. labor market, just focus on the AARP set.  Those workers 55 and older have roped in the lion’s share of the jobs in the last year – 962,000 of the 1.3 million total positions added since September 2013.


Older Americans were early to the employment party in the current anemic economic recover, knowing that they would need to work even as they hit their golden years.  The Trends data for “Jobs for Seniors” shows a distinct pickup in 2009 and has stayed at these elevated levels since then.  Top states for the senior job search set?   Ohio, Arizona, and (of course) Florida.


Search terms: “Jobs at Microsoft” and “Jobs at Twitter”.  The Google Trends data is also useful for examining where people want to work.  Microsoft, for example, has been a popular employment search-related query on Google since 2005, when the data begins.  Twitter’s impending IPO has, for the moment, made the social media company a hotter employment ticket, however.    The ratio of searches for employment at Twitter as compared to Microsoft was 75:60 last month.


Search terms: “Jobs at Google”, “Jobs at Facebook” and “Jobs at Apple.”  Between these three, the number of queries by people search employment at landmark tech companies skews heavily to Google.  Interestingly, this is not a new phenomenon.  All the way back to 2005, the search engine company received multiple more interest in employment opportunities than either Facebook or Apple.  The ratio even now is still healthily in Google’s favor: a Trends score of 71 for Google, versus 24 for Facebook and 21 for Apple.

In summary, we see two trends in this data:

U.S. stocks are getting a free pass as we close out 2013, lifted by performance chasing at the end of a strong year and little threat of Federal Reserve tapering.  At the same time, 2014 is going to have to deliver some actual employment growth to support elevated stock prices.  We don’t see any sign of that in the Google data.


As far as where people want to work, stock market chatter does seem to have an impact.  It is easy to say that this is just performance chasing as well, with the hopes of easy millions from options and stock grants.  Still, it also shows that equity markets influence where a society’s intellectual capital chooses to hang its collective hat. 

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zorba THE GREEK's picture

I don't always talk to Obama supporters, but when I do, I ask for

large fries with my burger.

batterycharged's picture

Does Jamie Dimon serve up large fries and burgers?

outamyeffinway's picture

Hopefully soon it will be license plates.

tickhound's picture

Fed policy, sound money, socialism, crapitalism... None of it matters anymore. Labor is a cost. It's always been. Labor hinders profit. Jobs are NEVER coming back. Three words for u bitchez who still don't get it and keep INSISTING we be the best hamsters running the wheel... Automation, paradigm, shift.

Seeking Aphids's picture

Makes sense, T. The employment participation graph clearly shows the rise from the 60's until the 90's....which can be explained mainly by the move of women into the marketplace......the subsequent drop is very worrying as we are seeing levels fall back the 70's or 80's levels even though women remain fully enaged in the workplace - this seems to indicate that there are strong new forces at play since the 90's...my guess is they include: the hollowing out of the US manufacturing base, automation and the use of new technology at levels. All of the above are not going to change soon and may even make things worse..........Solution? Wait for the boomers to retire? Let people work in p/t service industry jobs and let the standard of living drop? Better training? Let innovative businesses create jobs? Only the last one might work..............not holding my breath.........

Ying-Yang's picture

Obomber delayed ACA fines on large employers for a year to postpone the outrage.

Large employers will drop full time workers to save bucks.

Mass layoffs and moves from FT to PT will begin in earnest in Q4 2014


sethstorm's picture

Then things will be changed such that there is no exit - full-time would be the only classification and that using a temporary service would cost more from having to compete with guaranteed direct-hire.

akak's picture

When frisked by the TSA, his heart glows with pride.

He once sent the IRS an extra $100, just out of appreciation.

He believes that anything supplied by the government is truly "free".

He is ... the stupidest man in the world.

(Except for the hundreds of millions of others just like him.)

Stay servile my friends.

CheapBastard's picture

A former Department of Veterans Affairs official who resigned from his post last year amid revelations that the department had spent vast sums of taxpayer money on a pair of extravagant conferences was tight-lipped at a hearing Wednesday.

Former Dept. of Veterans' Affairs Assistant Secretary for Human Resources and Administration John Sepulveda invokes the Fifth Amendment Wednesday at a hearing on the agency's spending. John Sepulveda, the former Assistant Secretary of Human Resources at the VA, invoked his constitutional right against self-incrimination, repeatedly saying: "On the advice of my counsel, I respectfully decline to answer based on my Fifth Amendment constitutional privilege."

Although the House Oversight and Government Reform Committee hearing was short on new revelations, one exchange concerned the fact that the VA spent more than $400,000 on consultants — to determine whether or not they were wasting money.



A Nanny Moose's picture

I wouldn't disclose that on my Zero'Bamaobotcare application, if I were you. You may end up with a plan you do not like

RaceToTheBottom's picture

What, no one wants to work on WS?  

Or do they just keep it quiet so as to not invite physical damage?

lewy14's picture

Wall St is a very interesting FEMA camp indeed.

Built by its own inmates with enthusiasm.

They think they are keeping the "evil-doers" and the rabble out. 

Are they realizing yet that they themselves are penned in, under surveillance, and completely without freedom?

RaceToTheBottom's picture

Interesting, Do you think that they will ever admit to being park of something inherently evil, or do they have enough blocks to keep that realization from surfacing?

monad's picture

Boots on the ground here. I don't think the American masses are as stupid as portrayed in the ZOG lens. I have rapidly transformed hundreds of them up to their potential as an effective fighting unit. Sure, they are deluded enough to successfully execute whatever I ask before realizing what they are doing. Is that bad? Thats prime. Just don't feed them and they follow.

Don't look at me, I'm not part of the delivery system. Anymore. At least not anymore. It was a positive growth experience. To the rest of the world: duck.


lewy14's picture

I'll see your monad and raise you an applicative functor.

monad's picture

Bootcamp: 2 months

Specialist traning: 1 month

How long did Krugman take?

yogibear's picture

More job losses are bullish according to the Fed and the Wall Street banksters.

ebworthen's picture

The U.S. labor market is in the shitter.

It has just gotten worse since 2011, not better.

Obamacare, the suck ass economy, and no one wants to make a commitment to an employee.

sethstorm's picture

They will if they have to by law.

Frozen IcQb's picture

The jobs have been shipped to Asia and are not coming back. 70% of GDP is consumerism. Labor Participation Rate hasn’t been this low since Harriet joined the workforce in the 1970's. This is the new normal that cannot get better unless the dollar crashed by 75%. Only then would US wages be competitive but what a disaster that would be. The hardship of such a loss in purchasing power would tear the US social fabric.

22winmag's picture

Are you shitting me?


Even if there was a significant increase in service economy based jobs (ie. doing each others laundry and flipping each others burgers), so what? You can definitely forget about any sort of manufacturing too, it's subject to so many ever-changing rules and regulations from a dizzying array of unelected government thugs and agencies.

Make_Mine_A_Double's picture

Net out Fed/State/local gov't "jobs", temp & seasonal and part time (which shouldn't be counted) and we're net negative since 08'.

One look at the "decline" in labor force participation is all you need.

Question I've wondered is what the hell all these redundant folks are doing?

Protokletos's picture

The only sector I see having legitimate growth over the next 10 years is Energy, and even that won't provide the jobs US labor force needs

AGuy's picture

"The only sector I see having legitimate growth over the next 10 years is Energy, and even that won't provide the jobs US labor force needs"

I doubt that. For starters, Obama is forcing most coal fired plants to shutdown or limit output. Already many major data companies are building or planning to relocate to Canada as prices for electricity are likely to soar and Canada has a lot of cheap electricity. The Oil Frack plays will play out as production is peaking or about to peak. Energy companies will shift production overseas because of Gov't regulation.




Jobs.....We don't need no stinking jobs !  Lord Debt Brother provides.              

                     The FSA                

asteroids's picture

The reason why the FED and the BOJ have failed is due to demographics. Western countries are ageing rapidly. Raising the "retirement" age is stupid. Just because we live longer doesn't mean we are physically or mentally able to do the job. Some seniors have no desire to work until they drop. After a lifetime of work, they have earned rest. The sooner these moron politicians figure this out, the better.

AGuy's picture

Raising the "retirement" age is stupid. Just because we live longer doesn't mean we are physically or mentally able to do the job.

They are only raising the retirement age for young workers who won't reach retirement age in more than 20 years from now. Those 50 and and older can still retire. But it doesn't matter since the gov't spend all of the saved social security money and the system will soon go bust.

"The sooner these moron politicians figure this out, the better."

Politicians feed on the stupidity of the masses. After all, its the masses that vote them in office because they are too stupid to see them as snake-oil salesmen and carpetbaggers. The Politicans don't give two shits. All they care about is getting in office and using there power to enrich themselves, friends and family. The Politicans aren't stupid, its the people that vote for them.



Kina's picture

Raising the retirment age may hurt.


Blocks jobs for the younger ones, and older people will usually save whilst working, but spend the same or more when in retirment...unless they are poor.

starfcker's picture

they will have to bring industry back when they stop printing. but not a second sooner. we have shifted our assets around the globe now we're just waiting for all the great blessings for americans to start rolling in. think east india company but instead of brits running the colonies it will be goldmanites. this will be a boon for some, and certainly the standard of living in various third world environs will improve. but the goose that laid the golden egg, the most productive and inventive culture the  world has ever seen, has been pushed into the ditch. we're going to regret that. as long as we don't open the border, it can be fixed through our regular political process. watch the house. a second political party is forming. it's slow, there are plenty of frauds, but they are being exposed, one by one.

AGuy's picture

"They will have to bring industry back when they stop printing. but not a second sooner. we have shifted our assets around the globe now we're just waiting for all the great blessings for americans to start rolling in. think east india company but instead of brits running the colonies it will be goldmanites."

Not going to happen:

1. Any production that comes back will be automated with 90% of the work being done by machines

2. Workforce not educated to do the jobs.

3. Lack or resources and capital  to rebuild industry. When the dollar collapses, the cost of imports (energy, parts, electronics, etc)  will be unaffordable. Just like in Zimbabwe when there is insufficent capital and resources to rebuild the economy. The US will become the Bangladesh of North America.

4. The odds favor the US going out with a Bang by starting WW3 and wrecking civilization for the next thousand years.



starfcker's picture

i would say our human capital is always going to be far superior to zimbabwe. and even with all the new imports, our knowledge base is second to none.  we could pull the plug on globalization tomorrow. don't care much about the automation issue, that's called progress. but i don't think there is any big out of control inflation event on the imediate horizon. we are printing not out of desperation, but the world simply needs more money. again i refer back to TARP, i hated it but have come to believe it was genius. darth vader paulson saw it in a very clear way. not enough liquidity to run the system. as the engine gets bigger it needs more oil. yes, there is a ton of shit in the system. none of what i am refering to is about excusing criminal behavior.

exonomic halfbreed's picture

The U.S. labor market will start to accelerate when hordes of american coolies board ships for nations with jobs and real money and the Liberian Captains call below"Full Steam Ahead".

AGuy's picture

"The U.S. labor market will start to accelerate when hordes of american coolies board ships for nations with jobs and real money"

Doing what and where The rest of the world has excess labor force already. For every Chinamen or India with a job, there are ten more waiting in line for the same jobs. Thats why the work for 10 cents an hour. I serious can not see the average american who is 20 to 30 pounds overweight, spends half a day on Facebook/twitter or watching TV is going to work in a factory making 10 cent an hour. They much rather riot and go kill their neighbors and take there stuff.


Socialized Losses's picture

hell yes I need at least two them bitches to keep  workn for a chek or gettin some ebt to pay my bills. this niga gots needs

gregga777's picture

Dat right! How else folks think yo's gwanna get paid at duh fust of da' month? Huh?

gregga777's picture

Not only dat, but yo caint buys no Ripple o' Mad Dog onna da' debit card. Er, uh ah, I means on da' EBT card. Yo needs cash money fo da' likwid refrre...uh ah, fo da' dranks. Yay-ah, fo da' drankin' stuff. A man gets right thirsty afta a days hahd wuk unduh dat hot Flowdah son own da' front stoop! Yuh knows' what's I means?

sethstorm's picture

Key conclusions: there is no evidence of any faster pace of hiring, and the trend of hiring part time labor over full time is both strong (a 3:1 ratio) and accelerating

Then declare full-time as the only classification and head off the likely circumvention route by removing the ability for an employer to require that someone be taken on as a contractor or through a third party.

In other words, take away all the means to circumvent direct-hire, full-time employment for any perceived skill level.  If an employer wants to offer such, they would have to provide a better (and more costly) offer.

Evil Franklin's picture

You're getting back to the old "you know better than them" paradigm.  That's what got us into this mess.

sethstorm's picture

Not if the consent is truly mutual - where both parties negotiate on a reasonably even playing field - for work arrangements.  In the case I'm suggesting, it takes away desperation that happens in many people/few positions situations by expanding consent to forms of work. 

If someone wants to get something done with a lower tier of employment, they'll have to offer a better incentive. 


pazmaker's picture

Gildan Activewear to Create More Than 500 New Jobs in Three N.C. Counties

Are they making a mistake?

sethstorm's picture

Wrong side of the Mason-Dixon.

Evil Franklin's picture

After the U.S. population drops to 3,000,000 there will be no shortage of employment opportunities.

esum's picture

let's get serious... no one in corporate or political ussa gives a shit about the people or the labor market.. consumer market yes... but seriously ussa is so history... its india and china after all that resemble the usa in the 50's... detroit is the national prototype...for the time being until the lib hold on gubment is relinquished.. but the free shit crowd still loves the mulatto muslim despite obumbler care.. so there you go