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No Spring Swoon This Year For U.S. Labor Market
Talk for most of the spring (other than the incessant snowfall here in Minnesota through April and even into May with a few last inches yesterday) has centered around whether or not the decent job growth seen for the past 8 months and particularly since November, would peter out again this spring or summer as it has for the past 3 years. In 2010, job gains in Q3 fell 97% from Q2, while a year later, job gains dropped 36% between Q1 and Q2. Last year, the trend continued with a 70% drop in net job growth in Q2 compared to Q1. This year, we may have actually already seen the decline with job gains in Q1 falling 16% from Q4. Of course, that drop is entirely attributable to a horrible jobs report last month in which the Bureau of Labor Statistics reported that the U.S. economy added only 88,000 jobs in March. That unexpectedly grim report sent a chill through the nation’s economic psyche and raised fears that again this year we might see another spring swoon, as it’s been termed. Not to worry.
Based on LinkUp’s job search engine which indexes over 1.5 million job listings from 25,000 company websites throughout the country, net job growth in Q2 will rise 91% from Q1 with growth of 964,000 jobs. Of course, our May and June forecasts will be revised as we proceed through the quarter and pull in our job listings data in the next 2 months, but based on the growth in our index in February, March, and April, we can predict with some degree of confidence that job demand among employers is accelerating and job growth through at least the end of Q2 should be quite strong.
As background, the best available indicator of a future hire is a job listing that a company posts to attract job applicants to fill that opening. And the best source of those job listings is the company’s own corporate website itself because it’s free for the company to post jobs on its own site, there are no old, outdated, or already-filled listings, there are no duplicate job listings, and there is no garbage such as fraudulent listings from lead-gen marketing companies, work-at-home scams, or identity theft posts. Nearly as important, there are no listings from 3rd party intermediaries such as recruiters, staffing companies, temp firms, headhunters, or search firms.
The challenge in all this is that there are tens of thousands of corporate websites and indexing all of the job openings on all of them every day is unimaginably difficult. Fortunately, LinkUp does exactly that, and the 1.5 million jobs that we index from 25,000 corporate websites throughout the U.S. every day give us unrivaled ability to predict future job growth in the country. And what we see ahead of us looks quite good.
In February, new job listings on LinkUp rose 17% and total job listings on the site rose 10%. The blended average of 11.6% between new and total job listings points to a much-improved jobs report tomorrow morning. We are predicting net job gains of 238,000 jobs in April, higher than the consensus forecast and much better than ADP’s weak numbers that were released yesterday. Similar gains in March, with a blended average of 10% growth in new and total job openings indexed by LinkUp point to further job gains in May, and slightly positive numbers in our index in April point to modest job growth in June.
In April’s raw data, new job listings by state fell 6% from March, while total job listings fell 3%. Because of our paired month methodology that we use to account for the fact that we are constantly and aggressively adding new companies to the index (at a rate of about 100 per day), the raw data doesn’t match up precisely with April’s data in the table shown above that reflects a comparison to 2 data points for March. It’s important to keep in mind as well that at the end of May, we will pull in a second raw data point for April to compare May to April which might have an impact in what the final numbers for April look like. In any event, the positive job growth we expect to see in the BLS jobs reports for April and May will undoubtedly slow down in June.
In terms of jobs by category, new and total job listings fell by 7% and 4% respectively. Digging into the data a bit deeper, however, reveals a far more optimistic picture. A single category of jobs, Supply Chain & Logistics, accounted for a drop of 73,000 new job openings and 106,000 total job listings. If that category is removed, new and total job openings actually rose for the month. Equally as positive, 22 of 31 categories reported gains in new job listings and 24 of 31 reported gains in total job openings.
So while everyone is wringing their hands on the likelihood of a spring swoon, rest assured that job growth should pick up considerably from Q1. Let’s hope that our solid track record of accurate springtime predictions holds true again this year as it did last year when we predicted that the green shoots everyone was raving about were actually buckthorn. This year it should be azaleas, begonias, and bluebells.