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No ‘New Mediocre’ Here In The U.S. Labor Market; LinkUp Forecasting Job Gains of 293,000 In October; Q4 Looks Pretty Good, too
Despite serious and legitimate concerns about the emerging threat of the global economy entering an era of the ‘New Mediocre’ (Christine Lagarde), things in the U.S. look pretty decent these days, at least as far as steady job gains and declining unemployment go. Leaving aside for now the also serious and legitimate concerns about stagnant wages over the past 30 years, the ‘hollowing out’ of the middle class (David Brooks), and the fact that too many of the jobs added to the economy in this slow-motion recovery have been part-time and/or low-wage jobs, Friday’s jobs report should exceed consensus estimates. In fact, not only is LinkUp forecasting a net gain of 293,000 jobs in October, labor market data from our job search engine is giving us a preliminary indication that strength in the labor market should be sustained at least through the end of the year.
In August of this year, new job listings in LinkUp’s job search engine rose by 4.4%, while total job openings rose by 3.8%. Based on those increases and with the relatively safe assumption that the best indicator of a future job being added to the U.S. economy is an employer posting a job opening on its own corporate website (ALL 2.6 million LinkUp jobs are indexed directly from 50,000 company websites), we are forecasting a net gain of 293,000 jobs for Friday’s jobs report for October.
Not only should Friday’s numbers provide some welcome news, but October’s job openings data from our search engine provides some early hints that we should see steady job gains for at least the remainder of the year. Although slightly different than the data listed above for October (due to the paired-month methodology we use for our NFP forecast), new job openings by state rose 4% in October, while total job openings rose 1%. Of note, 43 states showed increases in new job listings, with only 5 states reporting a decrease.
Looking at the October data for job openings by category shows a similar picture, with new job openings by category rising 4% and total job openings by category rising 1%. Again, 27 of 31 job categories tracked by LinkUp showed increases in new job openings last month.
Drilling down into 3 specific job categories (manufacturing, education, and retail) provides additional evidence that things are different this year (finally!!) and quite a bit better than at least the past 2 years as far as trends are concerned.
As the graphs above indicate, new job openings in education and manufacturing and total job openings in retail have risen more steadily and earlier in the year than in 2012 and 2013. (The total increase is less relevant because some of the year-over-year increase is due to the simple fact that we have added thousands of new companies to our job search engine over the past 3 years).
The overall trend lines for new and total job openings on LinkUp over the past 3 years relative to each other also provide further evidence that unless the bottom falls out of the labor market in Q4, we should see a decent finish to the year.
Although we still have one more data point to capture next month when we compare November data to October, I’d estimate at this point, based on the data we have in hand, that we should add another 500,000 or so jobs in November and December. Combined with the 293,000 jobs we’re projecting for October, that would total nearly 800,000 jobs for the quarter.
Of course it’s still early, and we won’t have final data for the quarter until the BLS releases its 60-day revisions for December on March 6th, but there seems to be ample reason to believe at this point that the U.S. labor market just might be immune to the New Mediocre.