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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FieldingMellish's picture

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

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.

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.

Headbanger's picture

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


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...

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.

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...............

Postal's picture


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.

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.



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.

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.

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?


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?


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.

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..

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. 

whatsinaname's picture

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

TheRideNeverEnds's picture

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

CrashisOptimistic's picture

Why would they?

What has that to do with HFT?

ejmoosa's picture

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

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.

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

Lone_Star's picture

Q1 GDP already revised negative

Pure Evil's picture

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

Time to buy the all time fucking high bitchez!

ObamaDepression's picture

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

Overfed's picture

We've been in a depression since '08.

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 !


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.

Pure Evil's picture

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

CrashisOptimistic's picture

fonestar does seem to do that.

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?

Dr. Engali's picture

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

Overfed's picture

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

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.

CrashisOptimistic's picture

Is any of that in the HFT algorithms?

kill switch's picture

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

Smegley Wanxalot's picture

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

monopoly's picture

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

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.

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,

The_Ungrateful_Yid's picture

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

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.

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?

madbraz's picture

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

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

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.


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.

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?

Pure Evil's picture

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

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