12/23/2017 Toby Dayton

The Grinch and Scrooge Are Conspiring To Ruin Christmas With a Terrible December Jobs Report

Given the times we’re in, the Republican tax bill that was signed just this week, and our forecast for December’s non-farm payrolls, we have no choice but to lead with arguably the greatest Christmas curmudgeon of all time. But because it’s the holiday season, we’ll steer clear of politics (mostly) for this post and focus solely on the state of the job market in the U.S. and what things look like as we head into 2018.

To provide a bit of context for what’s happened in the labor market more recently, it’s worth providing (as always) some context about where we are in the the current business cycle. Now 9 years into the post-Great-Recession recovery, we’ve had 86 straight months of positive net job gains – the longest ever reported.

 

 

Not surprisingly, given that we’ve been in a full-employment environment for nearly 2 years and unemployment is currently sitting at 4.1%, companies are finding it harder and harder to attract applicants and fill their openings. As a result, while labor demand has remained quite strong, net job gains have been harder to come by. Assuming we’re in the ballpark with our December forecast and that October and November aren’t revised upward, 2017 will mark the 3rd straight year of declining job gains. It would also market the lowest annual total job gains since 2011.

 

 

 

Again, assuming we’re approximately correct in our December forecast, the year-over-year quarterly declines paint a pretty stark picture of what we can likely expect next year regardless of where one is on the political spectrum.

 

 

 

To make matters worse (in true Grinch-like fashion), new and total U.S. job openings pulled from company websites around the world declined 15% and 5% respectively in November. Just as foreboding is the fact that only 2 states (Maine and Montana) showed a gain in either new or total job openings.

As background, LinkUp only indexes jobs found directly on company websites. Our index of job listings includes roughly 5.5 million job openings each month indexed and updated daily from 45,000 company career portals around the world. And because we don’t aggregate jobs from other job boards, there are no duplicate listings or job pollution (scams, fraud, lead-gen, phishing jobs, resume hunters, 3rd-party intermediaries, etc.). As a result of our unique approach to the online job space, we possess the largest, highest-quality database of job listings in the market and are able to deliver accurate, predictive, real-time insights into labor demand.  

 

 

As an aside, because we are always adding new companies to our search engine, we use a ‘paired-month’ methodology for our non-farm payroll forecasts in order to normalize the upward bias that results from an ever growing set of companies in the index. In the data listed above, for example, we are measuring new and total job gains for a fixed set up companies that were in the index in both October and November which is why the totals are less than what would be the case if we used the entire dataset with no constraint on the companies.

So based on the steep decline in job openings in November, we are forecasting a net gain of only 80,000 jobs in December.

 

 

We’ll see what happens in early January when we report our data for December and the Bureau of Labor Statistics releases its Employment Situation report, but for now we’ll simply quote the 2nd greatest Christmas curmudgeon…

“Bah Humbug!”

 

 

One Reply to “The Grinch and Scrooge Are Conspiring To Ruin Christmas With a Terrible December Jobs Report”

  1. John A says:

    Here could be an explanation – commercial and industrial loans are in the process of collapsing.
    https://fred.stlouisfed.org/series/BUSLOANS
    ^Go to “Edit Graph” at the top-right and under Units select Percent Change from Year Ago. Notice it’s getting close to 0%. And notice it’s never hit 0% without going into a recession.

    That said, several times we’ve gone into a recession without it hitting 0%, though each of those times there was still a big dip, so who knows?

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