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Mind The JOLTS - There's A Bearish Warning In There
Submitted by Wall Street Examiner's Lee Adler via Contra Corner blog,
Janet Yellen’s favorite labor market indicator, the JOLTS survey, showed record job openings and hires in June as the Wall Street Journal picked up on a theme that I pointed out months ago. The ratio of hires to job openings has been steadily falling. They attributed it to one of the causes I pointed out a year ago when I first featured this issue. That is that employers can’t find workers to fill the jobs they are offering because workers don’t have the skills employers need. However, the analysts the WSJ cited all felt that the growing number of job openings was a bullish sign.
The Journal failed to mention the other cause–that the jobs being offered are so crappy and so low paying, nobody wants to take them. As I wrote a year ago and have alluded to frequently since:
… in spite of skyrocketing job openings, those jobs are not the kinds of jobs that real people, with their existing levels of skills, can fill, nor can they ever fill. There just aren’t that many rocket scientists and financial engineers available in the work force. Yes, that’s sarcasm. The biggest increase in openings has been in low paid restaurant and hotel jobs, which is just as much a problem. The US economy is beset with a huge, multi directional skills mismatch.”
So the growing number of job openings is not a good thing.
Another thing that the WSJ ignores is that the number of job openings is rising BECAUSE of these factors. An increase in the number of openings of menial, low paying jobs is therefore meaningless. Job openings will continue to grow and the ratio of hires to openings will continue to fall endlessly under these conditions because the vast majority of jobs being offered can’t be filled and won’t be filled. They’re either not real jobs because nobody has the skills to fill them, or they’re not real because they don’t pay a living wage. Or maybe they’re just not real job postings, period.
So the ratio of hires to openings just keeps falling.
In looking through the data I noticed something else that the lazy, Wall Street captured, mainstream media PR flacks either under report or misreport. That is the number of layoffs and firings, which are also included in this survey. The WSJ reported this number only on a seasonally adjusted basis, which is an abstraction, not the actual number. Just the same, here’s how the WSJ PR person put it:
“Another 1.79 million people were laid off or discharged in June, down from 1.66 million in May.”
Oops. I guess down is up.
I plotted the number of layoffs on an actual, not seasonally adjusted, yearly basis on an inverse scale to see if there was a correlation with stock prices. Lo and behold there was! Do you see what I see?
Layoffs increased from from 1.64 million in June of last year to 1.71 million in June of this year. In case you’re wondering, June was not a one trick pony. Every month this year saw more layoffs than the corresponding month a year ago. Why is nobody reporting that, or why, as the WSJ did, are they misreporting it?
With that plotted on an inverse scale with stock prices we see that layoffs also increased between June of 2006 and June of 2007, just before stock prices turned down. With the reporting lag the information wasn’t available to August, but there was still time to get out. Will 2015 see a repeat performance of layoffs as a leading indicator for a bear market? I would not bet against it.
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Man truth in numbers sucks...someone get on this and fix this so I can feel better about the recovery
One openiong was at Plum Island for MERS testing. MERS originates in camel's colons.
Kiss a colon for Christ
No takers.
Hi, you're young and you got your health. What you want with a job? [/Evelle]
I just read that they are printing out brain tissue now with 3d printers. At this rate it won't be long before they can print out an entire human being/clone. Then they will have plenty of cheap labor (cost of food and shelter) for lowing paying service sector jobs.
Thing is, if you own a restaraunt chain do you automate with robotics now or wait 10 years and employ a clone workforce?
What a dilemma.
Sounds good in theory, but I saw an economist on TV yesterday that said so many jobs will be done by robots in the near future, we should think about paying everyone a basic income even if they don't have a job. I guess this guy never heard of unemployment benefits, food stamps, Medicaid, etc. The problem with clones is that someone will eventually insist that they are equal to humans and should be treated/compensated as such. This is why we want to use robots that look nothing like humans.
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I've watched for years, miserable little companies, who fired people willy-nilly, turn to just poaching people from other companies, never doing any training of their own employees.
Couple this with 10+% unemployment, and this is all coming home to roost. We've been eating our seed corn for decades and now it's payback time!
People won't commit to companies who won't commit to them and then trash them out in 3 years.
Those @$$?Ø£?$ were and are right, it IS the new economy, just not the one the corporations thought it would be.
Sucks to be them!
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V-V
Tremendous energy subsidy from 100:1 EROEI fuel and economy with extremely low debt -> waste economy can afford to pretend paper-pushers, salesmen, middle-men, celebrities generate a return.
The low EROEI fuel runs out and the economy is saturated with debt -> waste economy can not afford to pretend make-work jobs generate a return, cannot gain enough debt at a low enough cost to gain enough fuel to subsidize the waste to keep the illusion going.
The proper measures of labor's value are its EROEI and net energy ratios. With that in mind, we see that labor's value has merely begun its reversion to the pre-petroleum mean, and it has a very long way to go yet.
Meanwhile, Janet Yellern, and just about everyone else, think that jobs have value because they enable credit expansion. They are fundamentally clueless.
Many say we need to bring jobs back to America. I don't think those jobs can be brought back because they don't even exist anymore... the robots do them now.
Let me help the author. Most of the job postings are cover for companies to push CONgress to increase immigration/visas to hire cheap workers. All the rest of the job openings are for what he describes - low skill low wage short term positions for throwaway workers.