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January Jobs Numbers Will Disappoint But February Looks Excellent; Strength In Labor Market Should Be Sustained Through At Least Q1
While the delay in posting our January jobs forecast is causing a bit of anxiety, the elevated stress levels have been greatly assuaged by the fact that cause of the delay lies the unprecedented demand we’ve seen for our core recruitment advertising services. Not only are we coming off the most successful year in our company’s history, but January also marked the most successful month ever for LinkUp, with paid search revenue jumping 20% from December and 60% from January of last year. And while I’d love to say that our growth can be entirely attributed to market share gains resulting from our highly unique and wildly compelling value proposition, at least a minuscule portion of the phenomenal growth has resulted from an improving job market and rising labor demand among U.S. employers.
Quite appropriately given the horrendous carnage of the Great Recession and the anemic economic recovery we’ve suffered through over the past few years, the nearly 3 million jobs added to the U.S. economy in 2014 have certainly captured the headlines of late. It’s certainly been a long time coming, so it is with great joy that we again post a few charts to further elucidate (and celebrate) the job growth we’ve seen over the past 12 months.
In 2014, the U.S. economy added an average of 242,000 jobs each month, a 25% increase over the 194,000 monthly average in 2013.
Job gains averaged 726,000 per quarter in 2014, and following a bit of a slow start in Q1, job gains steadily rose through the year. Employers added 819,000 jobs in Q4, although with revisions for November and December possible tomorrow and again for December in March, the Q4 numbers won’t be finalized for another month.
Unfortunately, however, we saw a decline in the number of job openings on LinkUp’s job search engine in November (-12.7%) and December (-2.4%). As a result of those declines, I wouldn’t be surprised to see a downward revision for November and December in tomorrow’s jobs report. And regardless of whether or not that occurs, because of the decline in job openings that we saw in December, we are forecasting a net gain of only 212,000 jobs in January, a weaker number than consensus.
The positive news, however, is that job listings in our job search engine (which currently lists about 2.8 million jobs indexed exclusively from 50,000 corporate websites throughout the country and internationally) rose sharply in January. New job openings rose 18.7% and total job openings rose 8.3%. Based on those gains, our preliminary forecast for February calls for a net gain of 362,000 jobs (our February forecast could be revised when we get additional data for January and February at the end of the month).
Drilling down into our data on a state by state basis, it’s clear that gains were spread throughout the country. Also of note, the precipitous drop in oil prices clearly is having an impact on labor demand in North and South Dakota, the only two states to show a decline in total job openings.
The gains in new and total job openings look similarly robust when looking at the 31 job categories that we track in our search engine.
So despite what may be a slightly disappointing Non-Farm Payroll (NFP) number for January in tomorrow’s Employment Situation Report, we remain confident that sustained strength in the labor market will result in very strong net job gains for the first quarter.