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June Jobs Report Will Be Slightly Better Than Anticipated; July Less So
With the nation’s singular focus on the economy as the November election rapidly approaches, all eyes will be on Friday’s jobs report for June. If the pundits on Slate’s Political Gabfest are correct (and at least John and Emily almost always are), most undecided and/or independent voters will be making up their minds in July and August. Without wading into the politics of the depression we’re in, there is no question that the next few jobs reports will be crucial in signaling to voters which direction the economy is heading. It is not a stretch in the least to say that the next few jobs reports from the Bureau of Labor Statistics (BLS) will not only move markets as they always do if they surprise up or down (see GaveKal chart below), but they will also largely determine who the next President will be.
The consensus forecast for June is that the U.S. economy added 100,000 jobs in June. Based on jobs data from LinkUp’s job search engine in May, we believe that the U.S. economy added 175,000 jobs in June. In May, new job listings on LinkUp rose 15.3% and total job listings rose 4.2%. Because a job listing posted on a company’s website is a strong indicator of a future hire (and LinkUp is the only job search engine that indexes only jobs from company websites), our data is strongly correlated to future job growth, be it up or down.
So based on May’s numbers, we are predicting that job growth in June rose by 106,000 over the net gain of 69,000 jobs in May. Unfortunately, our model is tied to the BLS numbers from the prior month. The government has, for the past year or so, been consistently revising their numbers in subsequent months which makes our task a bit like trying to score a goal on a net that is constantly being moved. But in any event, we are forecasting that Friday’s report will be better than anticipated. To be sure, the numbers will be below the 225,000 jobs needed to simply keep pace with population growth, but they will surprise to the upside. Unfortunately, July’s jobs report in early August will not be quite as strong.
In June, new job listings on company websites around the country feel by 8% and total job listings declined by 3%. LinkUp’s job search engine and the resulting jobs data is based on a database of over 1 million job listings indexed from over 25,000 corporate websites throughout the U.S. 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, lead-gen bait, 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, combined with the fact that our index is updated daily, LinkUp stands as the highest quality job site for job seekers and our jobs data is the ‘cleanest’ in the industry, entirely unencumbered by the noise that afflicts other jobs data sets.
In terms of jobs by category, the results were similar to jobs by state. New job listings fell by 7% and total job listings fell by 2%. Restaurant and Food Service and Hospitality and Travel were particularly hard hit, certainly an ominous sign for the general state of the economy.
As the chart below indicates, we are forecasting that the U.S. economy created a net gain of 175,000 jobs in May and 100,000 jobs in June.
So June and July’s numbers will be better than April and May but not as good the numbers in the first quarter. The economy seems to be just barely keeping its head above water, equally likely of drowning as surviving. As Christine Lagarde recently remarked, growth in the U.S. economy is positive – tepid to be sure, but positive.
We’ll see in November if that’s enough for Obama to keep his job.