Job openings dropped yet again in April, this time by a whopping 300,000. The long-term trend continues to be perplexing:
Just before the pandemic the total employment level was 48.1%. Today it's 48.0%. In other words, exactly the same. But in the interval job openings skyrocketed and are still considerably higher than in January 2020. By contrast, actual hires are close to the same.
The story this seems to tell is that the economy did well after the pandemic and hiring increased by a normal amount for a good economy. In other words, the blue line is the real story of the economy. But for some reason, businesses began advertising for far more jobs than they really needed. It was never a case of businesses not being able to find enough workers to fill their real requirements.
So what happened? Was it just panic? Some artifact of the hiring process? It's a mystery.
Advertising the same job in multiple places? (Wasted a whole 2 minutes trying to find out how they get their data. 🙁 If it's by survey, then a change in survey methods).
Yes, my first thought would also be to look for artifacts due to changes in data collection and/or data prep and analysis. Second would be to look for events that might have altered reporting behavior by respondents.
This has been discussed elsewhere and you can find breakdowns of industry's use of job openings on youtube. Essentially showing how job listings aren't representative of actual job openings and serve other company interests (poaching talent, inflating shareholder perceptions, etc). At least among the larger companies, it's garbage data.
This, especially the poaching talent part.
Yep. +1.
Somebody mentions this every time Kevin is confused by it, but it's explained by a change in behavior among companies and a change in the ecosystem of tools that they use to post openings.
yeah, asked and answered; this is kevin's groundhog day question
Not the only one. He has lots of economics groundhog day questions these past few years, to the point that they're beginning to look like intentional blinders.
+1
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"It was never a case of businesses not being able to find enough workers to fill their real requirements."
Citation needed!
We have been at very low levels of unemployment since the end of 2021. We have had a very high number of job openings since 2021. And for a long time, you couldn't swing a dead cat without hitting three stories of how employers couldn't find any one to work for them. You are rightfully skeptical of anecdata like that, but when you combine anecdata with real live data like what we see in this chart or in the EmpPop ratio or the unemployment rate, you can see a real pattern.
Further, the fact that the gap between the two has been coming down for months is entirely consistent with the story of a job market coming back into better balance. If something had changed about the hiring process we wouldn't expect to see reversion to the mean.
You've stopped talking about how The Fed was overreacting and didn't need to take any action on inflation, which is a relief, but you still seem stuck on the idea that nothing was particularly weird about the labor market in 2021 and 2022. It was a really weird time! Hopefully, things are getting back to normal. That doesn't mean they weren't really weird!
And for a long time, you couldn't swing a dead cat without hitting three stories of how employers couldn't find any one to work for them.
ceo's perennial complaint is that workers don't have the right skillsets
it's like a farmer who refuses to sow complaining that his fields have no corn
Sure, and a lot of that can be dismissed, but the fact that there were so many more complaints along this line 2 years ago than there are today tells you something.
It wasn’t just CEOs either. It was small business owners.
Restaurants that only opened five days a week, even though there was plenty of demand for seven, because they didn’t have enough waitstaff or dishwashers.
Retail stores who were limiting hours because they were manning the store themselves.
These were real things! Not just in the news, either - I experienced it firsthand, and I bet you did, too. It’s crazy to say there was no shortage of workers when these things were all around us. The economy was super weird in 2022!
Agreed. Everywhere I shop, businesses are complaining about lack of help.
My local post office branch was closed this afternoon when no one showed up to open the window during normal business hours. I'm 75 and I've never encountered anything like this before.
No doubt, unwillingness to pay livable wages can explain some of this, but not why this is happening more and more NOW, when in fact, wages have been rising.
I have no answers to offer, but denying basic data is NOT going to produce a useful explanation.
"job openings skyrocketed and are still considerably higher than in January 2022"
Huh? January 2020 or 2021 maybe. Not '22.
Even internal promotions require job ads. And ads are relatively cheap.
Plenty of ppl have misconceived ideas of what JOLTS openings is referring to. They're not reviewing listings in the public square, so to speak. They're randomly sampling from 21K businesses out of 11M, asking them how many openings they have that meet the requirements set forth by BLS.
Read: https://www.bls.gov/jlt/jltdef.htm#2 and https://www.bls.gov/jlt/jltover.htm#purpose
See OMB's PDF of the JOLTS survey (page 3): https://omb.report/icr/201907-1220-001/doc/93206501.pdf