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A Red-Flashing JOLT: Manufacturing Job Openings Signal Recession Dead Ahead

Tyler Durden's picture




 

Contrary to the April nonfarm payroll data, today's JOLTS report was simply ugly. First, the total number of Job openings of 4014K, missed significantly the expected number of 4125K, dropping 111K last month, and the worst since December's 212K tumble when as everyone recalls, the weather was extensively scapegoated as the reason why the economy is not performing as the priced to perfection central planning expects it to.

And now that weather excuses no longer can be abused, the experts finally repeated what we first said in November when we reported that "The Time To Hike Rates Is Now According To The Beveridge Curve" starting with Stone McCarthy:

... Typically openings precede payroll gains. Over the past 6 months
openings increased by only 116,000. This isn't consistent with the
payroll growth of late
...

 

... the relationship between openings and the unemployment rate, the co-called Beveridge Curve, suggests that there has been a structural shift in the curve typical of an increase in structural unemployment and perhaps a higher NAIRU than generally thought....

Then from Bank of Tokyo:

... JOLTS suggests there is not a whole lot of slack in the economy.... Labor market much closer to being satisfactory, much closer to maximum employment than policymakers acknowledge...

From Barclays:

... Ratio of unemployed job seekers to job openings rose modestly to 2.61 in March from 2.54 in February, near lowest level since July 2008...

And finally from Bloomberg:

Uptrends in openings, hiring are stalling at weak levels, supporting Yellen’s concern about labor market slack... Data suggest labor market similar to jobless recovery of 2003 or situation ~6-mos. ahead of 2007 recession

Ignoring that what this means is that the Fed should start hiking right about now, what did Bloomberg say - that the Labor market appear reminiscent of pre-recession stages? Why yes.

Below is a chart showing just how stretched the divergence between job openings, which tend to be a great leading indicator to employment, and actual employment. In fact, it has never been bigger. And since there is about a 6 month lag before the weakness in openings is manifested in the labor market, that means the monthly job numbers are due to start surprising to the downside right about... now.

 

But labor weakness is just the beginning.  A far worse harbinger revealed by today's JOLTS data is seen when one looks at the openings only for manufacturing jobs, which have now declined for 4 consecutive months: the longest negative stretch in the so-called recovery. The chart clearly shows that the last time we had an identical lack of improvement in manufacturing jobs, the US economy entered a recession, or as we like to call it, a depression, just that month!

 

Finally, recession or not, one thing is clear: when it comes to hiring, the so-called recovery has been one epic farce, because while the monthly jobs print may be back to pre-recession levels (courtesy of a collapse in actual firing and quitting, and retention of part-time workers sending productivity plunging), actual hiring is still about 50% off its prior cycle highs and it too appears to be slowly but surely plateauing. 

If next month's JOLTS data does not show a marked improvement, 18-24 months from now the NBER may come to a conclusion that the recession started just around June of 2014.

Source: JOLTS

 

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Fri, 05/09/2014 - 13:59 | 4744141 FieldingMellish
FieldingMellish's picture

We are probably already in a recession. Q1 GDP will likely be revised negative.

Fri, 05/09/2014 - 14:04 | 4744158 max2205
max2205's picture

You're crazy if the Obamerministration will allow a recession print before the mid term elections.

 

If you though he rigged the eco number's before the presidential election, you ain't seen nothing yet.

Fri, 05/09/2014 - 14:10 | 4744194 BudFox2012
BudFox2012's picture

Agreed.  I think they will try to hide the real numbers until things get so bad in the real world that they cannot be hidden.  We are not really that far away if the economy and food prices move along as they have.

Fri, 05/09/2014 - 14:17 | 4744214 Headbanger
Headbanger's picture

Yeah but Goldman and JPM have already said Q! GDP is negative:

http://www.zerohedge.com/news/2014-05-06/q1-gdp-cut-06-goldman

And there's nothing the Administration can do to prevent GDP form getting worse into the elections.

So the Dems are fucked.

 

It's Friday.  So I'm going out to buy so tequila.

I'll be back...

Fri, 05/09/2014 - 15:58 | 4744634 Headbanger
Fri, 05/09/2014 - 14:16 | 4744217 negative rates
negative rates's picture

Lets not be late on this one, don't tell me about it once it's over, we've been there, done that.

Fri, 05/09/2014 - 14:17 | 4744221 CrashisOptimistic
CrashisOptimistic's picture

Which is why oil is the only thing that matters.  The economy depends on it.

It is civilization's lifeblood and it can't be changed by decree or by printing.  In an election year, they can AT MOST, do an SPR release in the month or three before November, but that's it.  That's their only maneuver to attack the perpetual $100 we now see.

Fri, 05/09/2014 - 14:17 | 4744222 Hippocratic Oaf
Hippocratic Oaf's picture

'I think they will try to hide the real numbers until things get so bad in the real world that they cannot be hidden.'

 

and then they'll blame it on Bush.

or the weather...............

Fri, 05/09/2014 - 14:53 | 4744365 Postal
Postal's picture

Both:

Bush 41 executed Operation Desert Storm
The Iraqis torched their oil fields
Which increased CO2
Which caused global warming
Which caused all of the screwy weather lately.

Fri, 05/09/2014 - 15:05 | 4744438 TheReplacement
TheReplacement's picture

Ur jus rayciss.

Fri, 05/09/2014 - 14:21 | 4744241 aVileRat
aVileRat's picture

Easier to change the metrics than change the statistics. And on that note I really doubt they will have to do much to skew the data upwards. They have the new "Goodwill & Digi goods" in the GDP numbers, and also the unemployment numbers are strongly skewed to production assets.

Compounding on all this ball of wax, we have the ECB which is expected to announce their own QE program that will take off just around August, which is when Yellen is expected to "taper", and Abe should be prepping to leave the office, for the third time; and Japan to start to build their military forces as the ultimate "stimulus" program in 2016/17.

So whatever, we got at least another 7 months of bullshit to go before anything "real" happens.

 

 

Fri, 05/09/2014 - 14:11 | 4744198 ArkansasAngie
ArkansasAngie's picture

Well ... it will take some BIG rigging.  So big that I doubt they can pull it off.

BTW -- this peon does NOT believe there ever was a recover.  

Leave no incumbant in office

Especially since these yahoos think they can audit tea partiers with no recourse.

Fri, 05/09/2014 - 14:18 | 4744227 mayhem_korner
mayhem_korner's picture

Well ... it will take some BIG rigging. So big that I doubt they can pull it off.

 

If the baseline of what the masses believe is 50% exaggeration/mis-information, then the jump to 51% isn't hard to pull off at all.

Good luck with kicking out the incumbents - the election process is the first thing these "yahoos" rigged.

Fri, 05/09/2014 - 14:30 | 4744276 ejmoosa
ejmoosa's picture

The majority of the content of their numbers are "estimates".  

There's no mechanism for you to dispute their numbers.  

Have you not noticed that with this administration they are willing to deny facts all the way to the end.

Keep your doctor?

Keep your insurance?

Benghazi?

There's no reason to even list more.... but feel free to add some more of their lies below.  There are tons....

 

They been pulling it off for nearly six years...why stop now?

 

Fri, 05/09/2014 - 15:52 | 4744616 El Vaquero
El Vaquero's picture

Because they have been so ineffective at convincing all of us that people are getting genuinely pissed off.  Something's gotta give way, and if they don't let it give way peacefully, it will break violently.

Fri, 05/09/2014 - 14:34 | 4744302 Stoploss
Stoploss's picture

If the Libtard Dems don't rid the US of the IRS before the next election, the return favor will be quite the spectacle, one would have to be most certain of.

The hatred of the Dems is quite palpable..

Fri, 05/09/2014 - 15:51 | 4744608 El Vaquero
El Vaquero's picture

Gotta kick the K Streeters out of their offices first.  Otherwise, the new congress critters will rapidly become just as corrupt as the old.

 

Now is about the time that LawsOfPhysics needs to come in with his famous statement about rolling motherfucking guillotines. 

Fri, 05/09/2014 - 14:05 | 4744165 whatsinaname
whatsinaname's picture

Will the stock markets collapse if the economy has been officially been announced to have gone into a recession ? 

Fri, 05/09/2014 - 14:16 | 4744204 TheRideNeverEnds
TheRideNeverEnds's picture

No, recessions are super bullish; they mean moar QE.  

Fri, 05/09/2014 - 14:12 | 4744205 CrashisOptimistic
CrashisOptimistic's picture

Why would they?

What has that to do with HFT?

Fri, 05/09/2014 - 14:30 | 4744286 ejmoosa
ejmoosa's picture

No because that means things are set to improve any moment!

Fri, 05/09/2014 - 14:18 | 4744167 Pure Evil
Pure Evil's picture

There's no way.

Obama was out in Siicon Breasts Valley touting how well the economy's doing with minimum wages going to $15/hr.

Think how bullish that'll be down at the local strip club.

Fri, 05/09/2014 - 14:23 | 4744239 kill switch
kill switch's picture

We are going into a recession from a depression????? wow, this is great news!! Fucking idiots everywhere12,3,6,and 9

Fri, 05/09/2014 - 14:28 | 4744268 Lone_Star
Lone_Star's picture

Q1 GDP already revised negative

Fri, 05/09/2014 - 14:30 | 4744288 Pure Evil
Pure Evil's picture

Yeah but, in the New Obama Normal, that's positive.

Time to buy the all time fucking high bitchez!

Fri, 05/09/2014 - 14:56 | 4744381 ObamaDepression
ObamaDepression's picture

And don't forget we now have the new and improved GDP metric with an upwards bias!

Fri, 05/09/2014 - 13:59 | 4744143 Overfed
Overfed's picture

We've been in a depression since '08.

Fri, 05/09/2014 - 14:04 | 4744161 SilverDOG
SilverDOG's picture

Hopefully the PM's prices will regress to '08 Depression levels again.

Current production surely will not support such, but....

Bring 'em down !

A nice summer commodities crushing would be an early Holiday Season '14.

Print MF's PRINT !

 

Fri, 05/09/2014 - 14:14 | 4744213 CrashisOptimistic
CrashisOptimistic's picture

Hey, I have an idea.

Why don't we spam every thread with silver and gold talk when the article says nothing whatsoever about them, and let's do that despite the fact that there are plenty of gold articles that Tyler offers up every day as click bait for such people.

Fri, 05/09/2014 - 14:20 | 4744235 Pure Evil
Pure Evil's picture

Hey, I though you could only spam the threads with Bitcoin.

Fri, 05/09/2014 - 14:52 | 4744360 CrashisOptimistic
CrashisOptimistic's picture

fonestar does seem to do that.

Fri, 05/09/2014 - 15:00 | 4744408 J Pancreas
J Pancreas's picture

You're the most broken record on the Hedge! Someone might mention the NFL draft or say they walked their dog and you'd start babbling about oil. Pot calling kettle?

Fri, 05/09/2014 - 14:04 | 4744162 Dr. Engali
Dr. Engali's picture

We've been in a depression since 2000. Fixed that for you.

Fri, 05/09/2014 - 14:18 | 4744226 negative rates
negative rates's picture

Some of us dug out and are now looking for revenge.

Fri, 05/09/2014 - 15:44 | 4744586 Overfed
Overfed's picture

Thanks. I was still in total cognitive dissonace mode back then.

Fri, 05/09/2014 - 14:07 | 4744180 Relentless101
Relentless101's picture

Agreed. Its all fake. Market will be cut in half again once it unfolds. Gonna be a bitch when the latter part of baby boomers go to retire with no retirement wealth to speak of. Should have had a myRA.

Fri, 05/09/2014 - 14:21 | 4744240 CrashisOptimistic
CrashisOptimistic's picture

Is any of that in the HFT algorithms?

Fri, 05/09/2014 - 14:24 | 4744251 kill switch
kill switch's picture

I didn't see your post, fuckit where on the same page..

Fri, 05/09/2014 - 14:00 | 4744144 Smegley Wanxalot
Smegley Wanxalot's picture

"I now predict Q2 GDP to be up 6.8%, and Q3 roaring at 8.9%!  I am BoA."

Fri, 05/09/2014 - 14:01 | 4744151 monopoly
monopoly's picture

But, but, BofA just advised no recession for at least a decade. I, I, just do not understand.

Fri, 05/09/2014 - 14:02 | 4744154 Truther
Truther's picture

FUCK THE FED..... Bernanke to Yellen and whoever was there before that.

Now, How should I put it bluntly.. I am sick of this shit, the fucktards in DC, and the Nuland Bag of worms. Let it blow already.

Fri, 05/09/2014 - 14:03 | 4744156 Bill of Rights
Bill of Rights's picture

The key here is where do we go from here, and that is what the FED as well as the  Government can't seem to come to grips with....They have no clue,

Fri, 05/09/2014 - 14:06 | 4744172 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

American men must get their balls back and take the country back.

Fri, 05/09/2014 - 14:15 | 4744216 Bill of Rights
Bill of Rights's picture

From the Tyranny, yes I agree, but will it make us productive again? Way to many dependent lazy fucks as you know.

Fri, 05/09/2014 - 14:24 | 4744249 Pure Evil
Pure Evil's picture

Those men better hurry cause once sHILLARY gets elected all the men in the country will be neutered like the proverbial pooch.

Come to think of it, isn't transgender sex selection surgery covered by Obamacare?

Fri, 05/09/2014 - 15:59 | 4744642 negative rates
negative rates's picture

Sure, everything is covered under obamacare.

Fri, 05/09/2014 - 14:04 | 4744163 madbraz
madbraz's picture

Great...now they are going to rig these data sets too...

When the data is bad, just lie - so simple.

Fri, 05/09/2014 - 14:23 | 4744206 Bill of Rights
Bill of Rights's picture

Of course they will lie, they can't tell you what you already know cause it will cause panic. Again no one knows what to do, as in the past it was Lower rates and we had housing booms, that clearly is no longer taking place as the last sucker has left with the lights on.

 

Besides who want a (add your number ) $000,000 mortgage for 30 years no matter how low the rate is. Tell you what raise rates to 18% and sell me the house for ( add your number ) $00,000 notice the zero drop :)

The problem is not me affording to upgrade or buy another home, the problem is the .gov credit card is maxed out and THEY .Gov  can't afford the rate hike.

Sure raise taxes, Yawn, like the rest we will just keep leaving the labor force.

 

Fri, 05/09/2014 - 14:27 | 4744257 CrashisOptimistic
CrashisOptimistic's picture

Good call on all this.  They indeed don't have an answer.

The reason they don't is their paradigm is destroyed.  It was developed from infinite oil.  It's now scarce and getting scarcer and there is no solution for that.

And there never will be.

Fri, 05/09/2014 - 14:07 | 4744182 redd_green
redd_green's picture

Recesison dead aheaad?  Tyler's what you smokin, when did we ever get OUT of the last one that started in 1999?

Fri, 05/09/2014 - 14:25 | 4744255 Pure Evil
Pure Evil's picture

I guess you missed the CNBC memo about the green shoots.

Fri, 05/09/2014 - 14:27 | 4744266 Winston Churchill
Winston Churchill's picture

That was/is a Depression.In the last one there were two
distinct recessions within the depression.
Nothing WWIII won't sort out.Now we know that will
happen before Q2 gdp prints.
You were warned, they have run out of options.Too many
data points they cannot manipulate anymore than they already
have.

Fri, 05/09/2014 - 14:58 | 4744403 ObamaDepression
ObamaDepression's picture

Exactly. When you compare apples to apples via Shadowstats using original inflation methods we have not had any growth in a decade.

Fri, 05/09/2014 - 16:00 | 4744647 negative rates
negative rates's picture

He said it was a nasty one, so that could have been with ya for awhile.

Fri, 05/09/2014 - 14:13 | 4744210 mayhem_korner
mayhem_korner's picture

Labor market much closer to being satisfactory, much closer to maximum employment than policymakers acknowledge...

 

So...23% unemployment is now "maximum employment"?

Fri, 05/09/2014 - 16:42 | 4744782 Tenshin Headache
Tenshin Headache's picture

That may be the best this economy can do in its present emaciated state.

Fri, 05/09/2014 - 14:14 | 4744212 Sorry_about_Dresden
Sorry_about_Dresden's picture

Yellen has to be on the job for at least a year before they tank the economy, or admit to it beiing complete shit, so they can preserve the Bernake's Reputation as the savior. forever.

Fri, 05/09/2014 - 14:31 | 4744290 Bemused Observer
Bemused Observer's picture

If she doesn't really believe she can turn this thing around, she'd be better off just flooring it, right into the iceberg, the quicker the better so as to palm off blame.

Fri, 05/09/2014 - 14:24 | 4744246 OC Sure
OC Sure's picture

Then this goes well with an earlier article that GS is calling for a revision to Q1 for negative GDP; Recession = 2 consecutive Qs of negative GDP.

Fri, 05/09/2014 - 14:28 | 4744267 Pure Evil
Pure Evil's picture

Not to worry. It'll be just a two month negative reversion. What with Obama making minimum wage $15/Hr by executive fiat the economy will be Xanadu before the midterm elections.

Fri, 05/09/2014 - 18:55 | 4745062 knukles
knukles's picture

I sure as hell hope that Xanadu is better than this one....

http://search.yahoo.com/search?p=youtube+xanadu+olivia&ei=UTF-8&fr=moz35

Where's my Xanax?

 

Fri, 05/09/2014 - 14:26 | 4744259 ebworthen
ebworthen's picture

Barclays laying off 7,000.

Fri, 05/09/2014 - 14:44 | 4744332 Winston Churchill
Winston Churchill's picture

17,000 I read.

Fri, 05/09/2014 - 15:30 | 4744530 ebworthen
ebworthen's picture

You are correct, 7,000 was just in the investment bank division.

19,000 layoffs by 2016 according to this:

http://investorplace.com/2014/05/barclays-layoffs-bcs-cut-19000-jobs-2016/#.U20scFeZj9s

Fri, 05/09/2014 - 16:03 | 4744657 negative rates
negative rates's picture

With that Lehman club beating them in the back of the head daily, they'll be down to single digets before you know it.

Fri, 05/09/2014 - 14:26 | 4744260 foodstampbarry
foodstampbarry's picture

I've been doing contract work at a car battery plant for the last 4 years. Work has slowed to a crawl in the last couple of years, compared to years in the past. Talking to the truck drivers, who ship the bateries and they'll tell you, it's the slowest they've seen it since 08. Bankers are full of shit.

Fri, 05/09/2014 - 14:29 | 4744281 CrashisOptimistic
CrashisOptimistic's picture

Thanks for that data.

This kind of anecdotal evidence is the only thing we have to work with when we are fed the bullshit government "statistically significant" t-tested, regression coefficient based absurdity that is all they produce.

Fri, 05/09/2014 - 14:43 | 4744326 Winston Churchill
Winston Churchill's picture

Playing blind mans buff in a minefield is so much fun.
Another two of my suppliers are closing at the end of this month. The 'recovery' has killed them.

Fri, 05/09/2014 - 15:01 | 4744415 ObamaDepression
ObamaDepression's picture

I have an economics degree, securities and insurance licenses and a CFP. I'm working as a temp and cannot find full time employment. And that's in SF where we supposedly have ba "booming" economy with 5% unemployment! WTF?

Fri, 05/09/2014 - 18:48 | 4745042 nightshiftsucks
nightshiftsucks's picture

Nob Hill is hiring clerks in San Ramon,you can thank me for the tip after you get the job.

Fri, 05/09/2014 - 16:13 | 4744692 corporatewhore
corporatewhore's picture

Here's some additional anecdotal:  midwest location, very basic industry that everyone needs.  our demand got a nice increase with tax refunds but has fallen back to the previous low luster level that indicate that people are again delaying making a purchase.  incredible price pressure among competitors.  Conclusion: Turnaround brief fakeout.  even our distributors have limited inventory and aren't replacing on a consistent basis for many common everyday well known parts

Fri, 05/09/2014 - 14:27 | 4744264 Nutflush60
Nutflush60's picture

Get to work Madame Chair. It has worked well so far.

 

 

Fri, 05/09/2014 - 14:28 | 4744271 q99x2
q99x2's picture

The cause of joblessness is the onset of the Maunder Minimum. The lack of energized particles from the sun over the next decade will freeze everything. We are beginning to see the effects in the job markets. This may not be much of a problem if ice-9 manifests, beforehand, in the financial markets 

Fri, 05/09/2014 - 14:33 | 4744296 CrashisOptimistic
CrashisOptimistic's picture

Or . . . Occam points out at 30 story tall offshore oil rigs to get the same liquid out that a 15 foot tall wooden structure on shore used to gush and says "that is the reason".

Fri, 05/09/2014 - 14:39 | 4744314 OC Sure
OC Sure's picture

"The cause of joblessness is" "the world is a vampire."

Fri, 05/09/2014 - 14:53 | 4744366 ObamaDepression
ObamaDepression's picture

... JOLTS suggests there is not a whole lot of slack in the economy.... Labor market much closer to being satisfactory, much closer to maximum employment than policymakers acknowledge...

WTF? They're saying its a tight labor market? With a U-6 at 10%? WTF are these guys smoking?

Am I reading this wrong???

Fri, 05/09/2014 - 15:17 | 4744479 Tyler Durden
Tyler Durden's picture

It simply means the new structural unemployment rate is no longer 5% but realistically 8%-10% (which is where the U-3 print would be if one used a realistic participation rate). It also means that as the Fed eases, it no longer can even theoretically generate jobs (hence the drop in openings) and all the money ends up in inflating assets like the stock market, luxury housing, food, etc.

In other words, first the Fed was wrong about Flow vs Stock, now it is wrong about cyclical vs structural.

Fri, 05/09/2014 - 15:23 | 4744502 ObamaDepression
ObamaDepression's picture

Thanks for clarifying. How incredibly insulting to Americans.

Fri, 05/09/2014 - 16:04 | 4744664 negative rates
negative rates's picture

The Fed, always wrong, but never in doubt.

Fri, 05/09/2014 - 14:54 | 4744369 kito
kito's picture

we will find out about this recession in about as many years as it took to for the cia to declassify documents on how they overthrew the democratically elected leader of iran in 1953 to skank their oil.......

Fri, 05/09/2014 - 14:54 | 4744370 orangegeek
orangegeek's picture

another day, another technical indicator saying collapse.

 

S&P500 down 2.5

Fri, 05/09/2014 - 15:20 | 4744492 Spungo
Spungo's picture

Nonsense. We would know a recession is coming because people would panic sell gold and pile into stocks. Gold miners bottomed in October 2008, about 5 months before SPY bottomed in March 2009. If a major SPY crash were on the horizon, wouldn't gold miners have crashed in 2013 and bottomed some time around December? That simply hasn't happened, therefore buy stocks.

Fri, 05/09/2014 - 15:35 | 4744553 Winston Churchill
Winston Churchill's picture

+100
Very dry.

Fri, 05/09/2014 - 15:47 | 4744595 Itchy and Scratchy
Itchy and Scratchy's picture

Recession = by stawks!

Fri, 05/09/2014 - 19:04 | 4745090 beaver club
beaver club's picture

I think he meant "scotch"?

Fri, 05/09/2014 - 23:24 | 4745563 AdvancingTime
AdvancingTime's picture

One area we should pay more attention to is how the different sectors of the economy dependent on discretionary spending fared. I contend a shift is occurring within the ranks of shoppers and consumers that is causing the little economic growth occurring to be the "wrong kind of growth" and not healthy over the long term.

Recent job numbers create a false illusion that mask over what is really happening as incomes grind to a halt and inflation nibbles at the buying power of the average American. In my opinion the wrong people are buying the wrong things. Auto sales, student loans, and healthcare spending have become key drivers in this economy. Below I reconcile the recent job numbers and why spending trends signal danger ahead.

http://brucewilds.blogspot.com/2014/05/reconciling-april-jobs-report-wit...

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