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LinkUp Forecasting 225,000 Jobs In July and Strong Numbers For Rest Of 3rd Quarter
With the jobs report coming out in 45 minutes, there isn’t much time for in-depth analysis of our jobs data this month. As is the case on a few occasions every year, the 1st of the month falls on a Friday, the same day that the Bureau of Labor Statistics (BLS) releases their Employment Situation Report. Our monthly jobs data is compiled at about 5AM on the 1st, which gives us about 2 hours to run the numbers, work them into our forecasting model, put together some quick analysis, and write what can only be classified as a very rushed blog post. The only solace to be had this morning is that no amount of additional hours of leeway would have clarified the foggy view of our data these days.
In July, on a state by state basis, new job openings in LinkUp’s job search engine by state fell 4% from June, while total job openings fell 3%. But we use a paired month methodology in our model to account for the fact that we are always adding new companies into our search engine along with all their jobs (about 500 new companies and 100,000 jobs each month). As a result, we get 2 data points for every month – the first when we compare a give month to the prior month, and the 2nd when we compare that same month to the following month. And then we use both data points for each month in our model. In any event, there are occasionally periods where the simple comparison of job openings from one month to the next conflicts with the more complicated way in which our model is built. The past few months have been just such a case.
The second muddying factor is whether or not our data is a leading indicator by 30 days or 60 days. We start with the assumption that a job opening posted on a company website is the best indicator of a future job being added to the U.S. economy. (And 100% of LinkUp’s job openings in our search engine are indexed from company websites so there are no old jobs, no duplicates, and none of the job pollution that’s found on so may job sites these days – things like work-at-home scams, fraud, identity theft, etc.). But if a job opening is a leading indicator of a job being filled and added to the economy, is the lead-time 30 days or 60 days? Depending on what is going on in the labor market, it could be one or the other, and it shifts over time. Again, it looks like we are in a period where it is shifting, which makes it really hard to know whether or not, for example, the July numbers should be based on May or June’s LinkUp data.
So with all that pre-amble out of the way, not to mention the fact that July is a highly seasonal month, we are forecasting that the U.S. economy added a net gain of 225,000 jobs in July due to the slight drop (-2.6%) in the blended average of new and total job openings in May. Our numbers are a bit below the consensus forecast for the month.
While a net gain of 225,000 is a drop from the solid 288,000 jobs added in June (which will be undoubtedly adjusted in 13 minutes), it would be the 6th straight month of monthly gains above 200,000. Even more encouraging is the fact that in June and now again in July, our forecasting model shows monthly increases in job openings from the prior month which bodes well for job gains in August and September. Unfortunately, our raw data has shown declines in new and total job openings for the past 3 months, making it somewhat difficult to garner any confidence in our forecast. Given our solid track record over the past few years, however, I’m sticking with my model and it’s indicating that we’ll see 225,000 in 8 minutes and strong numbers for the rest of the 3rd quarter.