Jack Dunn - Reclaiming Common Sense

The monthly JOLTS Report (Job Openings Labor Turnover Survey) for Aprilwas released this week. The Jobs Report, Employment Situation Report we released last week was the Jobs Report for May.article has already written numerous articles on the April Jobs Report.

What was revealed in this JOLTS report? Did we learn anything new? According to the mainstream media we have more Job Openings than Unemployed workers. Does this mean anything? The JOLTS reported includes non-farm payroll from fifty states, using 16,000 entities as its source. It reports on workers (Current Employment Statistics Equivalent.) The Current Employment Statistics survey  "surveys approximately 149,000 businesses and government agencies, representing approximately 651,000 individual worksites," per the CES website. Both collect their data around the 12th of the month. There is no comparison. That said, what did we learn?

Four sectors had the lion's share of the Jobs Openings. Leisure and Hospitality (LAH,) Education and Health Services (EHS,)  Trade Transportation and Utilities (TTU,) and Professional Business services (PBS ) saw the most Job Openings Last Month. Last month, during the month of April, the lowest wages were paid in LAH, other Services, TTU, and EHS. There were 6.7 million Seasonally Adjusted (SA) Job opening during April. There were 7.2 million Non-seasonally Adjusted (NSA) Job openings during April. Last month there were 5.7 million NSA U-3 Unemployed workers. This is why the media were "hot and bothered" regarding the disparity between Job Openings and Unemployment.  Remember from the "Five Presidents Article" that there are also at least 7 million to 11 million people who are "effectively unemployed" who are not calculated in the U-3 unemployment rate. This effective unemployment rate compared the participation rate during the 15th month of the Reagan Administration (7 million more workers should be present) and the Obama administration (11 million more potential workers.) If we go to Clinton or Bush #43 we should have an additional 15 million workers. Let's not get greedy.re:

Go Figure Low Wages, High Quits. The same sectors that had high job openings had high levels of workers quitting.  The highest quits were for LAH, PBS, TTU and EHS. The same four sectors with a slightly different order.

More Job Openings, Higher levels of hires. Go figure. The highest levels of hiring during April were PBS, LAH, TTU and EHS. Same sectors, different order, again.

There has been considerable discussion regarding the level of jobs openings and the unemployment levels. There has been considerable talk regarding rising wages. The problems that are apparent is that the seasonally adjusted data is manipulated every month of the year. The Current Employment Statistics (CES) data was massively revised this January for all of 2015, 2016, 2017 making 2016 look better than 2017 and making 2017 look better than 2018. Retail sales have been manipulated to make it look like we are in a Retail Ice Age rather than a Retail Renaissance. Comparing the JOLTS Job Opening Data to the Current Population Survey (CPS) unemployment level is comparable to comparing poll results with election results or comparing Apples and oranges.  Apples and oranges are both fruit, both grow on trees, both can be eaten whole or consumed as juices. One can be used to make a Screwdriver while the other can be used to make hard cider.

Job Openings have been rising for nine years. Job openings have been at, or near, record highs since 2015. Unemployment rates and unemployment levels have been declining since 2010. This month we happened to have the official values appear as if there were more openings than unemployed workers. The are two reports with two different surveys of different sample sizes. There is more that is recorded in both of these reports than are reported. Participation matters. Wages by sector matter. workers by sector matter. Trends matter. We know that the participation rate is significantly lower than what it was during 2001, the period of time with which most of this data is being compared. The JOLTS data gives a very blurry snapshot. We do not know if these openings, quits, or hires are full-time jobs or part-time jobs. We do not know if the openings are seasonal jobs or permanent jobs. This data also tells us where the job opening were during April. The JOLTS data tells us nothing about where the Job Openings are during June.

It's the economy