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Expect A Negative December Jobs Report On Friday, But January Jobs Report Should Be Better
Cheering for a positive jobs report from the Department of Labor these days is quite similar to cheering for the Minnesota Vikings of late; I’m always hopeful but there just isn’t much in the statistics to get too encouraged about. And unfortunately, the November jobs data published by LinkUp a month ago doesn’t bode well for this Friday’s BLS report for December. On a more positive note, however, our jobs data for December presents at least a glimmer of hope that the nation’s jobs picture might improve slightly in January.
I’ll start with November’s LinkUp jobs data that we use in our model to predict actual job growth for December. Given the fact that a job posted on a company’s website is the best leading indicator of a future hire, combined with the fact that the average job opening indexed by LinkUp remains open for 27 days, it is November’s job openings data that translates into the jobs numbers for December.
So in November, new job listings in LinkUp’s job search engine (which today includes 765,000 job listings indexed directly from 22,000 company websites) dropped 19% from the prior month while total job listings fell 6%. November was the 3rd consecutive month of declines in both new and total job openings, and the number of new job listings for the month was 50% fewer than January of 2011.
Given the steady decline of new and total job listings in Q4, we are forecasting that Friday’s jobs report from the Bureau of Labor Statistics (BLS) at the Department of Labor will be far worse than consensus forecast which calls for job growth of 155,000 jobs in December. Equally as negative, we predict that the BLS will revise down their numbers for November of last year. A month ago, the government reported that 120,000 jobs were created in November, but our model indicates that, in fact, no net job growth occurred during the month. (For a much more extensive explanation of what we see as an inevitable downward revision, read my previous blog post here).
Combining the downward revision for November to zero and the LinkUp data for December, we are forecasting that the U.S. lost 100,000 jobs in December. I’ll hedge my bet a bit by stating that if BLS revises their November numbers to a lesser extent than what we anticipate, or not at all, the job growth for December will be 100,000 jobs fewer than whatever the final BLS number is for November. (As an aside, following the 11 initial monthly BLS jobs reports for 2011 issued so far, there have been 17 revisions, and they could still revise November again next month when they release their jobs report for January).
(The percentages for new and total jobs in LinkUp are different than what I reported earlier because the chart above is the average of the two job counts we capture for a given month – the first comparing it to the prior month and the second comparing it to the following month).
Two other charts provide additional cause for concern regarding this week’s jobs report that are worth highlighting. The first is the average number of job openings per company in the LinkUp job search engine, and the second is the total number of jobs in our job search engine since 2007 (which also includes a rolling 90-day average).
As is evident, both graphs clearly indicate that the positive (albeit still anemic) job growth that occurred in the first 3 quarters of 2011 has come to a screeching halt in Q4. Fortunately, our jobs data for December provides a glimmer of hope that things might improve just slightly in January.
In December, new job growth was flat from November, while total job growth declined by 2%. Neither data point provides much to get excited about, but they are definitely better than the numbers from the prior 3 months. The other positive news is that 23 states showed an increase in new job openings. (…funny quirk that states beginning with M showed particularly strong growth in new job listings: Massachusetts, Maine, Michigan, and Montana).
In terms of jobs by category, new job openings rose 1% while total jobs declined by 1%. Like new jobs by state, roughly half of the job categories we track reported an increase in new job listings, led by Oil, Gas & Utilities, Maintenance & Repair, and Aerospace, Aviation, & Defense.
As background, LinkUp is the only job search engine on the web that indexes only jobs found on corporate websites throughout the U.S. Updated daily, LinkUp’s job search engine contains 765,000 job openings indexed from 22,000 company websites. Because LinkUp does not include any jobs sourced from job boards and does not allow anyone to post jobs directly to the site, the search engine does not include any garbage listings such as job scams, phishing posts, work-at-home-scams, or old listings. And because LinkUp only indexes jobs from a single source (the employer’s corporate website itself), there are no duplicate listings that pollute aggregator sites such as Indeed and Simplyhired. As a result of these entirely unique attributes, not only is LinkUp the highest quality job site for job seekers, but our jobs data is the ‘cleanest’ in the industry, entirely free of the noise that afflicts other jobs data sets.
So expect a bleak report on Friday, but rest assured that things will be a tad better in January. And who knows, maybe next year the Vikings will be back in the NFC finals. In the meantime, GO WILD!