Earlier today I ran across a headline in the Wall Street Journal informing us that job openings were down in August. That sounded interesting, so I pulled up the data to take a look.
Down? I should say so:
Yikes! In the space of a single month we lost more than a million job openings. With the exception of the first month of the pandemic (not shown in the chart) this is more than double the next biggest loss over the entire past decade.
One way or another, employers decided in the blink of an eye to withdraw 1.1 million job openings. Is this the start of the jobs recession the Fed is so desperate to inflict on us?
Er, that's... interesting.
I was told budgeting would be painful this year at my subsidiary of $monstrously_large_corporation.
I guess the working class of the overlords got their marching orders.
I’m going to bet a lot of those jobs weren’t real. Like I’m sure they were listed, but not in good faith… just there to keep current overworked employees onboard with a “see we’re trying to get you extra help, give us a few more months of 60 hours at your regular salary.”
I’d believe it. My crew is expected to do the same work as before we lost a few dozen workers, and I’m not impressed with the effort of the past several months to hire more people.
My employer has had a position open for over 2 years now, ever since the pandemic began. Thankfully, this empty position isn't in my field of work, so its vacancy doesn't increase my workload. But for 4 of my coworkers, they keep accruing OT (voluntarily or involuntarily) because they have to cover for the missing 5th person. They ask all the time if that position will ever be filled, and they are assured that HR is reviewing more applications, conducting interviews, administering the entry exam (the position is somewhat technical), readvertising the position, rinse wash and repeat. Their OT is almost definitely cheaper than salary + benefits for a 5th person, so I strongly suspect the "plan" is for that position to remain empty forever.
It's still over 10 million openings/month. I did see a blurb saying it's still above pre-pandemic levels...though without numbers and nice charts....
This will be my last time posting a reminder about the Beveridge Curve and NAIRU, and commenting re inflation, jobs, and the Fed rate. For reference on all this a I exit the topic, see: https://twtr.in/3LuX and https://twtr.in/3LuY
Given that we haven't seen a single month change of this magnitude in any month on the chart, this makes me think it's almost certainly an artifact of how it's counted/a technicality.
It's possible there's some of that. On the other hand we've seen decreases in openings in the 400k range this past summer. So maybe the increase to a million singals a weakening of the labor market. That would be my guess.
I don't think Drum's presentation of the data is particularly helpful. If you look at a graph of job openings (link below), you see that there were around 7 million job openings in 2019. The number of job openings fell below 5 million in April 2020 due to the pandemic, but climbed over the next two years, hitting a high of nearly 12 million in March 2022. Since then, openings have been declining, but the most recent number is still 10 million. My take is that the economy is returning to normal after the disruptions caused by the pandemic, but we aren't there yet.
https://fred.stlouisfed.org/series/JTSJOL
thank you
At minimum, he should label it differently to say "net change in number of openings." But sure, it's less meaningful without the total.
I think this is basically right. Here's the actual lede from the WSJ story:
Openings dropped the most in healthcare, retail and other services industries. The decline in openings coincided with an August easing of job growth. Employers added 315,000 jobs that month, compared with 526,000 jobs in July. The figures reflect a labor market that is still strong overall, but lost some steam in August after recovering rapidly from the effects of the pandemic.
Yes, the full graph shows a rounded peak turning to decline, not a "blink of an eye" change.
1.7 jobs per seeker, still pretty strong
Biggest drop in retail hiring. Expected scaled-back Xmas for many?
This matches my experience. Over the summer, I was working on recruitment in software development and I noticed that over the course of the summer, we no longer needed to do active search. Applications were coming in. Then word from management was that we should just stop hiring.
We're a small outfit. I think the drop may be overstated in the data, but anecdotally it seems true to me. Something changed in August and September.
When looking at the economy, economist (such as members of the Fed Reserve) use multiple data sources. For example, the Baltic Dry Index is a totally separate measure that is popular.
A change is any one index is not definitive: however, I believe the Biden Administration would prefer job openings increased by a million during August.
Related to the economy I found this article disturbing
https://www.theepochtimes.com/the-economists-self-censored-and-inflation-is-a-result_4748000.html?utm_source=epochHG&utm_campaign=rcp
Well, if Falun Gong says it, it must be true.
High job openings and low unemployment do not cause inflation themselves. Unemployment was very low for a long time before 2020 without causing inflation. And the NAIRU is a joke - it has never worked.
Inflationary pressure only comes if wages increase at a high rate. Kevin has shown time after time that wages are not increasing as fast as prices - anyone can verify this at FRED. The BLS wage data are presumably reliable and are confirmed by other statistics such as financial stress and savings. So a drop in openings is probably not very relevant to inflation, but may be a sign of overall downturn.
Better, more honest headline. "Employers quit lying about non-existent job openings".