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LinkUp Forecasting Upward Revision Of August Numbers & Net Gain of 265,000 Jobs In September; Expect A Weak Q4 Unless We See AP (#28) and QE (#4)
As the leaves begin to turn up here in Minnesota and thoughts turn to once again to skating on frozen lakes and ponds, it also marks the time of year where one can hop on the roller coaster thrill-ride that is the Minnesota Vikings. With a seemingly endless supply of ups and downs and twists and turns, the Vikings never cease to turn stomachs, and this year is certainly no different. Just 4 games into the season, there have already been enough story lines with this year’s team to keep ESPN busy for weeks, from outdoor football in Minnesota to AP and Teddy to Mike Zimmer and Norv Turner. As has always been the case with the Vikings, there is just enough promise to remain hopeful, excited even, and yet there are also plenty of reasons to be very concerned and keep one’s emotions in check.
The exact same thing could be said about the U.S. labor market. While there are a number of very positive indicators that potentially point to continued job gains, an equal number of flashing yellow lights have appeared on the horizon, forcing one to acknowledge that the road ahead likely entails some unexpected nausea.
In September, new job openings in LinkUp’s job search engine (which only includes jobs found on corporate websites) remained flat from August. New job openings on corporate websites throughout the country rose by roughly 60,000 in September to 1.98 million, a gain of 3% from August.
The data in terms of job openings by category presents the exact same picture, with new job openings remaining flat from August and total jobs climbing just 3% from the prior month.
Looking at the year in total, new and total job openings in our search engine, particularly new job openings, have been steadily declining since a pretty decent showing in the first half of the year. Although we had a nice string of positive months over the summer, the pace of job openings growth has steadily declined, and average new job openings turned negative in September for the first time since May.
As a result of the steady gains in job openings we saw between June and August, we forecasted a very strong jobs number last month. We also indicated at the time that job gains would remain solid through the fall and into Q4 based on the leading indicator for labor demand (in the form of 2.4 million job openings sourced from the 50,000 or so corporate employers in LinkUp’s job search engine). But alas, like the Vikings upset win over the Patriots a few weeks ago that was not meant to be, we were devastated by a dismal jobs report last month. And while there are plenty of reasons to expect a significant upward revision to August’s numbers on Friday and despite our forecast for a solid number for September, our rosy outlook for the U.S. labor market in Q4 is far more tempered than it was just 30 days ago.
For Friday’s jobs report, we expect the BLS to report a net gain of 265,000 jobs in September, a very solid number to be sure. But unfortunately after that, the downward trend we’ve seen in LinkUp’s job openings over the past few months (and actually the entire year) will begin to weigh heavily on the labor market. As a result, we have some serious concerns about the kinds of jobs numbers we might see in Q4.
What we really could use at the moment is for the reappearance of AP (#28) and QE (#4).