Reclaiming Common Sense

Last week we received a strong January Jobs Report

Tuesday We Received a Strong December JOLTS Report

This month we have received the first wave of the final economic reports for 2020. Last month we received the December ADP Private Sector Payroll Report, Weekly Unemployment Claims Data, and the December Employment Situation Report. The December ADP report surprised on the high side.

Remembering that the Jobs Report is created using two different databases, the Current Employment Situation (CES worker and wages data and the Current Population Survey (CPS) jobs and unemployment data, remembering that the Weekly Unemployment claims data has nothing to do with the monthly U-3 Unemployment Number, remembering that the ADP Private Sector Payroll data is totally different from the CES Non-Farm Payroll data, and remembering that the JOLTS data is comparable to, and different from, the Current Employment Statistics Data, what happened this month with the December JOLTS data?

We had a Record December for Hires, Quits, and Separations. The number that normally garners the majority of the JOLTS headlines is the Job Openings number. This year the non-seasonally adjusted Job Openings dropped month to month and December to December. The December 2018 level was 6.921M, the November 2019 Level was 6.468M, and the December 2019 level was just 5.892M. This is still the second most for the month of December. December 2017 we had 5.127M openings December 2017, 6.921 million December of 2018 and 5.892 million December 2019.

  • Hires Dropped Month to Month and rose December to December. December 208 we had 4.210 Million Hires, November 2019 we had 5.401 million Hires, and this month we had 4.367 million Hires.
  • Quits rose month to month and December to December. We had 2.908 million Quits last December, 2.967 million Quits last month, and a December Record of 2.975 million Quits this December.
  • Separations Rose month to month and December to December. Last December we had 5.139 million Separations. Last month we had 5.032 million Separations. This December we had a December record 5.394 million total separations.

Record Quits mean than workers feel confident that they can find another job. Near record Job Openings mean that employers are still planning on growing this year. The other graphs can be found here.

The Sectors with the most Job Openings also had the most Quits, Separations and Hires. This month the top four are still the top four sectors. This month, as during prior months the positions flip from category to category. This month the interesting data was the fifth place sectors.

  • Job Openings were most in Education and Health Services (EHS,) Professional Business Services (PBS,) Trade, Transportation and Utilities (TTU,) and Leisure and Hospitality (LAH.) Construction came in fifth place.
  • Hires saw the top four sectors as PBS, TTU, LAH, and EHS. Construction came in fifth place in Job Openings and Hires.
  • Quits were highest in TTU, LAH, PBS, and EHS. Grouped in a clustered for fifth, sixth, and seventh place were Manufacturing, Construction, and Government,
  • Separations were highest in TTU, PBS, LAH, and EHS. Fifth place was occupied by Construction. The current month Job Openings, Hires, Separations, and Quits graphics can be found here.

The real story here, this month, is that we are seeing substantial activity in Construction. This bodes well for New Home Construction and New Home Sales Data.

The December Job Openings data fell because it was December and Job Openings Fall during December. They also fell because hiring was at a record level. Five data sets, ADP, CES, CPS, JOLTS and the weekly unemployment claims data agreed that the economy was good, even though they speak different languages. Will the January JOLTS Report reflect the strength of the January Jobs Report? We will find out after the release of the February Jobs Report.

It's the Economy.