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Have a Great 4th of July – Friday’s Jobs Numbers Will Be Alright
Perhaps all the pessimists have finally gotten to the U.S. labor market. Or perhaps they were right all along and the recovery was never as strong as we all wanted it to be. But it seems as if the litany of negative influences may have finally caught up to the U.S. labor market. From the January payroll tax, sequestration, Europe, Obamacare, Spring Swoon IV, freakish fear of the Fed tapering, or just a horribly anemic, death-march recovery from The 2nd Great Contraction, the job market appears to be slowing down from the first half of the year (and it was never really moving that fast to begin with). Friday’s jobs numbers are going to be slightly better than expected (a net gain of 195,000 jobs), and July will show a gain of 205,000 jobs, but August job growth will fall back down to a net gain of only 105,000 jobs. (Keep in mind, however, that our August forecast will be revised when July’s LinkUp numbers come in).
Our forecast comes from the number of new and total job openings in LinkUp’s job search engine. LinkUp’s index contains 1.5 million jobs from over 38,000 corporate websites. The best available indicator of a future hire is a job listing that a company posts to attract job applicants to fill that opening. (The lag time between a job opening appearing on LinkUp and that job being filled with a hire is about 60 days). 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own corporate website itself because it’s free for the company to post jobs on its own site, there are no old, outdated, or already-filled listings, there are no duplicate job listings, and there is no garbage such as fraudulent listings from lead-gen marketing companies,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. So with LinkUp’s high-quality job search engine, we have a very clean data set that is free of the noise that clouds other labor market data sets. And unfortunately, that data is pointing to a slow-down in hiring this summer.
In April, a blended average of new and total jobs rose just 1.2% from March. Based on our model, that means that June’s jobs numbers will come in only slightly higher than the 175,000 jobs gained last month. (Of course, it is highly likely that the Bureau of Labor Statistics will revise its May numbers given the strong job openings growth we saw in February and March). In May, new and total job openings rose just 0.5%, so July’s jobs report will show a net gain of 205,000 jobs. But the decline we saw in new and total jobs on LinkUp in June point to a very weak jobs report for August, with a gain of only 105,000 jobs.
On a state by state basis, new job listings fell 13% while total job openings on LinkUp dropped 4% from May. Even more alarming, almost every state in the country saw a drop in new and total job openings.
Looking at jobs by category, the data is equally as grim. New and total jobs fell 15% and 4% respectively and again, a majority of categories saw declines in new and total job openings.
With the bleak forecast, my advice is to ignore this post, enjoy a great 4th of July, look for a decent jobs report on Friday, and let’s hope the numbers improve as we move through the summer.