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December Jobs Report Will Resemble Shatner’s “Nightmare at 20,000 Feet”
Only one time in my entire life have I ever experienced an aborted landing. It was about 15 years ago or so, and we were flying into Atlanta for a friend’s wedding. There were huge thunderstorms surrounding the airport, and we were flying right through them. The afternoon sky was as dark as night and the plane was bouncing around like I had never before experienced, while rain beat against the small window to my right and lightning flashed amongst the clouds seemingly non-stop. It was pretty hellish, and as we finally dropped below the clouds about a thousand feet above the runway, it was obvious that this was going to be a really, really rough landing.
The entire cabin of the plane was eerily silent as the plane was buffeted all over the place in every direction. Everyone was well aware that there was not a chance that we’d hit the ground smoothly or at all parallel to the runway. And then, out of nowhere as we were right about to touch down pretty much sideways, and with absolutely no warning whatsoever, the nose of the plane went straight up, the engines roared to life at a deafening level, and we shot straight up like a rocketship. The speed of the plane crushed everyone back in their seats and we held on for dear life wondering what the hell had happened.
After about a minute or two, which at the time seemed like an eternity, we catapulted above the enormous thunder clouds and sunlight poured into the darkened cabin. The pilot let up on the engines and leveled out the plane as everyone in the cabin exhaled at last. Pretty quickly after things had settled down, the pilot came on the air to give us all an update on exactly what had happened. He said that we had obviously had an aborted landing and that our plane was actually the 3rd in a row to abort its landing which meant that the entire airport automatically shut down. He also said that Northwest (this was before the merger with Delta) had recently installed brand new, state-of-the-art wind shear equipment on all its planes, and that the entire screen on the new panel in the cockpit was a dark magenta color, the highest reading possible. He admitted to the entire plane that had never seen anything like it.
That very same warning level pretty much sums up LinkUp’s December jobs data. Aside from a single ray of sunshine in South Dakota, the entire country is a deep shade of red, filled with a seemingly endless series of double-digit declines in new and total job openings.
The table for job openings by category looks just as bad.
These horrific numbers (the worst we’ve seen since March of 2011) continue the trend seen in our data since the beginning of the year. Since February, month-over-month gains in new and total job openings that employers have posted on their own corporate websites have slowed down every single month (except July) and actually started reversing, or turning negative, in September.
While the Bureau of Labor Statistics (BLS) numbers mirrored our data for the first 3 quarters of the year, the two sets of data have diverged dramatically in the past few months. According to the BLS, the labor market has been improving nicely of late and their data would have us believe we are in the midst of a perfectly smooth landing (albeit after a torturously long, 3-year delay prior to departure). If the consensus forecast for December’s jobs numbers, which will be released on January 10th, is accurate (a net gain of 190,000 jobs), the BLS data would indicate that roughly 600,000 jobs were added in Q4, as reflected in the chart below for 2013.
Needless to say, the increasingly divergent sets of data are a bit perplexing, if not outright disturbing. I can’t tell if our instrumentation has gone totally haywire, or we are the only people who can see what is really happening in the labor market. I feel a bit like William Shatner in The Twilight Zone episode Nightmare at 20,000 Feet who sees a monster on the wing of the plane that no one else can see.
If we aren’t going completely insane and our data continues to be an accurate predictor of job gains or losses in future periods (as it has over the past 4 years with a .76 correlation), the jobs numbers for December and January are going to be abysmal. With the declines we’ve seen in new and total job openings in October and November, we are forecasting a net gain of only 100,000 jobs in December. Based on the decline in new and total job listings in LinkUp’s job search engine in December, we are forecasting even worse figures for January, when job growth could actually turn negative. And if the figures for October and November are revised on the 10th, which could very well happen, the numbers in December and January might be even worse.
It is worth noting, however, that we’ve made similar calls for the past 2 months and have been miserably wrong. For the sake of the 14 million Americans still looking for work, especially the 1.3 million people who just lost their long-term unemployment benefits, as well as the entire U.S. economy, I sincerely hope we continue to be wrong. But the data is what it is, and what we see indicates that we’re in for a serious scare next Friday.