News from around the world has been pretty miserable of late. It’s tough to open up the paper these days (yes, as a news junkie I still read newspapers) and not feel like the world is falling apart. From Syria and Gaza to Libya and Liberia, it’s been a horribly grim end to the summer. In the U.S., things haven’t been much better between Ferguson, severe droughts in the west, and perpetually expanding dysfunction in Washington. Perhaps the only bright spot in the news these past few months is the continued economic recovery and the strengthening labor market. Data from the The Department of Labor’s Bureau of Labor Statistics (BLS) indicates that the U.S. economy added 1.6 million jobs in 2014 through July, with an average monthly increase of nearly 230,000 jobs. One can most certainly argue about the nature (part-time v. full-time) and quality (high-wage v. low-wage) of those jobs and point as well to the millions still unemployed and underemployed, but there is no question that the labor market is finally showing signs of sustained momentum. Unlike years past, when decent job gains early in the year failed to keep pace through the summer and into the fall, things appear to be quite different this year. Job gains have increased as we’ve move through the year, and based on LinkUp’s job openings data from the summer, we are forecasting continued strength well into the fall.
As background, LinkUp is the largest job search engine on the web that only indexes jobs from company websites. Updated every 24 hours, the jobs found on LinkUp are always current, and there are no duplicates because we only index jobs from a single source – the company’s website itself. And because we do not aggregate jobs from any other job sites or allow anyone to post jobs directly to LinkUp, we have eliminate all of the job pollution that plagues almost every other job site these days (phishing, work-at-home-scams, fraud, identity theft, lead-gen, resume-trolling, etc.). LinkUp currently has 2.3 million jobs indexed from approximately 50,000 company websites and we are adding roughly another 1,000 companies and 100,000 job openings each month.
Based on the significant gains we saw in June in new and total job openings in LinkUp’s job search engine (6.7% and 10.1% respectively), we are forecasting that the U.S. economy added 310,000 jobs in August, well ahead of of the consensus estimates for Friday’s jobs report from the BLS.
Solid LinkUp job opening gains continued in July and August (albeit at a diminishing rate), and we expect that the labor market will show continued strength through the fall. In July, new and total job openings rose 7.6% and 7.1% respectively, and in August they rose 4.6% and 5.8% respectively. The gains in August mark the first time since we began tracking our data this way (in 2010) that the blended average between new and total job openings exceeded 5% for 3 straight months. Based on the fundamental assumption that a job opening posted by a company on its own corporate website is a decent indicator of a future job being added to the U.S. economy (we’d argue the strongest indicator available anywhere), we expect to see decent job gains for at least the next few months. Of course, we will have additional data to look at in the coming months and things could most definitely change when we get our September and October data.
Furthermore, if companies cannot find the candidates they need to fill their openings, the lag-time between when a job is posted and when it’s filled will grow, which means that job gains could be lower than they might have otherwise been (we will be issuing our ‘Jobs Duration Report’ later this week). But for now, things look pretty good, and the ‘raw’ data for August is extremely encouraging. In August, new job openings by state rose 3% from 753,000 in July to 779,000 in August. Total job openings by state rose 4% from 1.922 million in July to 1.997 in August. Especially noteworthy is the fact that not a single state showed a decline in total job openings for the month.
Very similar data was seen in terms of job openings by category, where new and total job openings rose 3% and 4% respectively.
With those gains, our preliminary forecast for September indicates that we will see another very strong month of job gains next month that should again exceed 300,000.
If our forecasts for August and September are accurate or even in the ballpark, job gains for the 3rd quarter will be nearly double the gains seen in any 3rd quarter since 2011.
That would constitute some most welcomed news, at least as far as the U.S. economy is concerned. Of course, should things play out that way, everyone will immediately begin panicking about whether or not the Fed will accelerate its plans to begin raising interest rates and the markets would likely become quite volatile. But that’s a post for another day. For now, everyone should just be happy we’re seeing the kind of consistent jobs numbers we’ve been dreaming about since the Great Recession started 6+ years ago. It’s about time, to say the least. On Wednesday, September 3rd, at 10AM CST we will be hosting our monthly jobs data webinar during which we will walk through LinkUp’s job openings data, our analysis of what we are seeing in the labor market, and our forecasts for the coming months. If you would like to register for the webinar, please do so here.