Diggings

A blog by Toby Dayton
Huge Job Listing Gains On LinkUp In January Point To Significant Job Growth In February

Posted on Thursday 2 February 2012

It’s hard to imagine that the muddled jobs picture could possibly get any murkier, but it is. Between ADP’s ‘Purge Effect,’ archaic seasonality adjustments (i.e., UPS and FedEx are still not fully accounted for in seasonal holiday hiring models), constant backwards revisions from the Department of Labor (a game ADP is now even playing), and a baffling initial December jobs report from the Bureau of Labor Statistics, it is becoming increasingly difficult to get an accurate sense of what is going on with the nation’s jobs picture. And while tomorrow’s jobs report may not provide much clarity, there is little doubt that based on LinkUp’s jobs data for January, the picture will not only get a lot clearer in February, everyone in the country (with the possible exception of Mitt Romney) will be ecstatic about what that picture looks like.

But before we get to February, I’ll start with our prediction for tomorrow’s BLS data for January. Based on LinkUp’s jobs data from December, we are forecasting that the U.S. economy added 20,000 jobs more than whatever the country added in December. I say that not to be cute, but because our model is based on the change in job growth or decline from the prior month. So if the BLS does not revise the numbers it reported for December (job growth of 200,000), then we predict that the economy added 220,000 jobs in January. However, if the BLS revises its December numbers down (as we believe they will and should), then our forecast is that January’s job growth will be 20,000 higher than whatever they revise it to. (Unfortunately, they will most likely revise December’s numbers again in the February Employment Situation report that will be released in March).

But far more critical than the January numbers, which will be pretty milquetoast in any event, will be the revisions to the November and December numbers. Based on LinkUp’s jobs data from Q4 ’11, there is no conceivable way that the U.S. economy added 300,000 full-time jobs in November and December. In fact, our model indicates that the U.S. economy actually lost 60,000 jobs in the final 2 months of the year.

If tomorrow’s BLS revisions reflect the fact that job growth has been negative or even significantly more muted than previously reported, I have to believe that the markets will respond accordingly. Having said that, however, the bearish sentiment will be short-lived given LinkUp’s jobs data for January. Based on the 50% increase in new job listings from company websites and the 19% gain in total job listings on company websites, combined with the fact that all 50 states saw increases in both new and total job listings, the BLS report for February will undoubtedly be the most positive employment report the country has seen in years.

For background purposes, LinkUp is the only job search engine on the web that indexes only jobs found on corporate websites throughout the U.S. Updated daily, LinkUp’s job search engine contains 830,000 job openings indexed from 22,000 company websites. Because LinkUp does not include any jobs sourced from job boards and does not allow anyone to post jobs directly to the site, the search engine does not include any garbage listings such as job scams, phishing posts, work-at-home-scams, or old listings. And because LinkUp only indexes jobs from a single source (the employer’s corporate website itself), there are no duplicate listings that pollute aggregator sites such as Indeed and Simplyhired. As a result of these entirely unique attributes, not only is LinkUp the highest quality job site for job seekers (and it’s FREE!), but our jobs data is the ‘cleanest’ in the industry, entirely unencumbered by the noise that afflicts other jobs data sets.

The jobs by category numbers in January were equally as positive, with 30 of 31 categories reporting increases in new job listings and all 31 categories reporting increases in total job openings.

Based on LinkUp’s fantastically positive jobs data from January, we are forecasting that the U.S. economy will add 150,000 more jobs in February than whatever the number is for January. At the moment, without accounting for any revisions that might take place tomorrow or next month, that number would be 370,000 jobs created in February.

And no matter what happens in tomorrow’s report with data from November, December, and January, it is absolutely certain that the jobs picture is finally starting to improve and that, furthermore, the rate of improvement is accelerating. I’d even go so far as to state that what we are seeing indicates that employment rolls will snap back faster than almost all the pundits are predicting, and that the end of the Great Recession might actually start coming into view. Wouldn’t that be fun?

Even Mitt would have to cheer for that.

Expect A Negative December Jobs Report On Friday, But January Jobs Report Should Be Better

Posted on Wednesday 4 January 2012

Cheering for a positive jobs report from the Department of Labor these days is quite similar to cheering for the Minnesota Vikings of late; I’m always hopeful but there just isn’t much in the statistics to get too encouraged about. And unfortunately, the November jobs data published by LinkUp a month ago doesn’t bode well for this Friday’s BLS report for December. On a more positive note, however, our jobs data for December presents at least a glimmer of hope that the nation’s jobs picture might improve slightly in January.

I’ll start with November’s LinkUp jobs data that we use in our model to predict actual job growth for December. Given the fact that a job posted on a company’s website is the best leading indicator of a future hire, combined with the fact that the average job opening indexed by LinkUp remains open for 27 days, it is November’s job openings data that translates into the jobs numbers for December.

So in November, new job listings in LinkUp’s job search engine (which today includes 765,000 job listings indexed directly from 22,000 company websites) dropped 19% from the prior month while total job listings fell 6%. November was the 3rd consecutive month of declines in both new and total job openings, and the number of new job listings for the month was 50% fewer than January of 2011.

Given the steady decline of new and total job listings in Q4, we are forecasting that Friday’s jobs report from the Bureau of Labor Statistics (BLS) at the Department of Labor will be far worse than consensus forecast which calls for job growth of 155,000 jobs in December. Equally as negative, we predict that the BLS will revise down their numbers for November of last year. A month ago, the government reported that 120,000 jobs were created in November, but our model indicates that, in fact, no net job growth occurred during the month. (For a much more extensive explanation of what we see as an inevitable downward revision, read my previous blog post here).

Combining the downward revision for November to zero and the LinkUp data for December, we are forecasting that the U.S. lost 100,000 jobs in December. I’ll hedge my bet a bit by stating that if BLS revises their November numbers to a lesser extent than what we anticipate, or not at all, the job growth for December will be 100,000 jobs fewer than whatever the final BLS number is for November. (As an aside, following the 11 initial monthly BLS jobs reports for 2011 issued so far, there have been 17 revisions, and they could still revise November again next month when they release their jobs report for January).

(The percentages for new and total jobs in LinkUp are different than what I reported earlier because the chart above is the average of the two job counts we capture for a given month – the first comparing it to the prior month and the second comparing it to the following month).

Two other charts provide additional cause for concern regarding this week’s jobs report that are worth highlighting. The first is the average number of job openings per company in the LinkUp job search engine, and the second is the total number of jobs in our job search engine since 2007 (which also includes a rolling 90-day average).

As is evident, both graphs clearly indicate that the positive (albeit still anemic) job growth that occurred in the first 3 quarters of 2011 has come to a screeching halt in Q4. Fortunately, our jobs data for December provides a glimmer of hope that things might improve just slightly in January.

In December, new job growth was flat from November, while total job growth declined by 2%. Neither data point provides much to get excited about, but they are definitely better than the numbers from the prior 3 months. The other positive news is that 23 states showed an increase in new job openings. (…funny quirk that states beginning with M showed particularly strong growth in new job listings: Massachusetts, Maine, Michigan, and Montana).

In terms of jobs by category, new job openings rose 1% while total jobs declined by 1%. Like new jobs by state, roughly half of the job categories we track reported an increase in new job listings, led by Oil, Gas & Utilities, Maintenance & Repair, and Aerospace, Aviation, & Defense.

As background, LinkUp is the only job search engine on the web that indexes only jobs found on corporate websites throughout the U.S. Updated daily, LinkUp’s job search engine contains 765,000 job openings indexed from 22,000 company websites. Because LinkUp does not include any jobs sourced from job boards and does not allow anyone to post jobs directly to the site, the search engine does not include any garbage listings such as job scams, phishing posts, work-at-home-scams, or old listings. And because LinkUp only indexes jobs from a single source (the employer’s corporate website itself), there are no duplicate listings that pollute aggregator sites such as Indeed and Simplyhired. As a result of these entirely unique attributes, not only is LinkUp the highest quality job site for job seekers, but our jobs data is the ‘cleanest’ in the industry, entirely free of the noise that afflicts other jobs data sets.

So expect a bleak report on Friday, but rest assured that things will be a tad better in January. And who knows, maybe next year the Vikings will be back in the NFC finals. In the meantime, GO WILD!

Learning to Use An Alethiometer

Posted on Saturday 3 December 2011

There were a number of interesting aspects of today’s jobs report from the Department of Labor related to each of the following:

1) LinkUp’s forecasting model

2) Flaws in the government’s numbers

3) The state of the jobs picture in the U.S.

In reverse order, I’ll start with today’s report. The Employment Situation Report issued today reported that 120,000 nonfarm jobs were created in the U.S. in November, a number that includes a gain of 140,000 private sector jobs and a loss of 20,000 government jobs. With the decline of total unemployed Americans falling from 13.9 million to 13.3 million, combined with a drop in the labor-force participation rate and an increase of 133,000 ‘Marginally Attached, Discouraged’ people who have stopped looking for work and are therefore not counted as unemployed, the unemployment rate dropped from 9% to 8.6%. And finally, the BLS revised their jobs numbers for both September and October. The initial September jobs report claimed that 103,000 jobs were created in September. In October, BLS revised this number to 158,000, and this morning, it was revised again to a gain of 210,000 jobs in September, a 104% increase from the original number. Similarly, the BLS initially reported that 80,000 jobs were added to the U.S. economy in October, a number that today was revised up to 100,000.

It is the magnitude and frequency those revisions to the government’s numbers that point to serious flaws in the Department of Labor’s monthly jobs reports. Over the past 11 months, there have been 17 such revisions to the government’s numbers. I have no idea what happens between the initial report and the subsequent reports 30 and 60 days later, but  the initial release of the ‘Employment Situation’ report is now so consistently revised in future months as to have rendered itself virtually meaningless when it is first issued. Not only do those revisions make it difficult to accurately assess what is going on with the nation’s jobs picture, but they have wreaked havoc on our forecasting model at LinkUp.

The forecasting model we have built around the jobs data from our job search engine is essentially based on 2 factors: the change from one month to the next in new and total job openings indexed from 22,000 company websites throughout the country (which we obtain from our own job search engine), and the job gains or losses reported by the BLS for a given month. Without question, a job opening is the best leading indicator of a future hire, and we can use our data from a given month to predict how many jobs will be added or lost in the following month. And because the LinkUp search engine only indexes jobs from company websites, we have the cleanest data set of any jobs data set in the country. (There are no old jobs, no duplicate listings, and no job scams, phishing jobs, work-at-home garbage, or fraudulent posts. And certainly most appealing, we don’t have any job listings posted by mass-murderers). We then use the ups and downs of new and total job listings on LinkUp for a given month to predict the jobs gained or lost for the following month based on the reported job gains or losses reported by the BLS for the prior month. This is not as complicated as it might appear, and I’ll use the past few months to better explain how our model works.

In June 2011, new and total job listings on LinkUp rose by an average of 5.7% from May. For the past 6 months, the number of days that companies have kept a job listing on their corporate websites has averaged 27 days, so it makes sense that June’s increase in job openings indexed by our search engine would translate into job gains in July as reported by the Labor Department. And indeed, the BLS report for July reported that 127,000 jobs were added to the U.S. economy in July. But to forecast the positive 127,000 jobs in July, our model relies on the relative differences between the job gains or losses reported by the BLS from one month to the next. To predict what would happen in July, for example, we started with the 20,000 jobs that were gained in June (as reported by BLS). Based on our model, we estimated that given LinkUp’s 5.7% increase in job listings in June, the +20,000 in June would go up somewhere between 100,000 to 150,000 jobs, and it actually went up 107,000 to the 127,000 jobs reported by BLS. (That’s the delta BLS in the table above, and I wish I knew how to find/use the symbols font in WordPress so I didn’t have to spell out ‘delta’).

In July, new and total job listings on LinkUp declined by an average of 0.6%, so our model predicted that in August there would be a decrease from the +127,000 from July of somewhere between 0 to 100,000 jobs. The actual decrease was 23,000, as the BLS reported that in August the U.S. economy added 104,000 jobs. Job gains for August were positive, but size of the increase was 23,000 less than the size of the previous month’s increase, right in line with what our model predicted.

In August, new and total job listings on LinkUp rose by an average of 4%, so we predicted that job gains in September would rise by at least 100,000 from the 104,000 jobs gained in August. And again, our model worked perfectly as the BLS reported that the U.S. added 210,000 jobs in September (an increase of 106,000 from the 104,000 increase in August). Unfortunately, the 210,000 jobs gained in September were not reported until this morning, 60 days after the initial September jobs report issued on the first Friday of October. The initial jobs report for September claimed that the U.S. added only 103,000 jobs that month, a decrease of 1,000 jobs from the 104,000 jobs gained the prior month. So in that first week of October, it looked like our model was dead wrong. But then the September number was raised to 158,000 in early November, and our model looked a little better. This morning’s reported increase in job gains during September to 210,000 has proven that our prediction for September was flawless.

The 60-day revision for September by the BLS also proved that our October forecast was accurate as well. In September, new and total job listings on LinkUp declined by an average of 10.9%, so our model indicated that the 210,000 jobs gained in September would drop to a gain of only 70,000 jobs in October. The initial BLS report for October reported a gain of 80,000, but that number was revised to a gain of 100,000 jobs in this morning’s report. My guess is that that number will be revised down in next month’s report, but in any event, we were pretty close.

All of this is a long, and perhaps terribly muddy way of saying that the initial numbers reported by the BLS are horrendously unreliable of late and that our forecasting model is fantastically accurate. (And I can assure you that neither of those statements are made cavalierly). It is also an overly wordy preamble to the following statement: There is absolutely no way that the numbers reported this morning for November are accurate. The 10.1% decline we saw in LinkUp’s index in October indicates that the rate of increase in job gains should have declined in November by at least 100,000, meaning that even if one assumes that the +100,000 number for October will remain unchanged next month, there were zero jobs created in the U.S. in November. And because we are henceforth abandoning our reliance on the ‘noisy’ initial numbers reported by the BLS, that is going to be the starting point for our next forecast, not the flawed +120,000 reported by the BLS this morning.

Like Lyra’s brilliant but gradual mastery of the alethiometer, so too are we improving our use of the powerful jobs forecasting tool we’ve built.

 

Tomorrow’s Jobs Report Will Disappoint Again According To LinkUp Job Search Engine

Posted on Thursday 1 December 2011

Like clockwork every month, the pundits on Bloomberg and CNBC state definitively that THIS month’s jobs report is certainly the most widely anticipated report in recent memory. Unfortunately, I cannot argue their claim. With each passing month that the U.S. economy spends stuck in the quagmire of the 2nd Great Contraction, with its horrifically high unemployment, hope grows that it’s this next jobs report that might finally indicate that a jobs recovery is around the corner. Expectations are again high for a positive report tomorrow as economists are forecasting of a gain of 150,000 jobs in November. Some economists have even been scrambling to revise their forecasts upward in light of the positive report from ADP earlier this week. But like Charlie Brown perpetually believing that this time Lucy will actually let him kick the ball, tomorrow’s BLS report will again disappoint and the labor market will again be flat on its back in agony.

Based on LinkUp‘s jobs data from October, when new job listings on company websites throughout the U.S. declined 14.9% from September and total job listings dropped 5.3%, we are forecasting that the U.S. economy lost 70,000 jobs in November. (LinkUp is a job search engine that indexes job openings from thousands of company websites throughout the U.S.). Even more depressing, there’s a decent chance that the Department of Labor will revise their October jobs numbers downward in tomorrow’s report. The BLS initially reported a month ago that 80,000 jobs were created in October, but our forecasting model indicates that only 50,000 jobs were created in October given the weak jobs data from LinkUp in September. If that proves correct, then tomorrow’s report could be even more dismal.

LinkUp is the only job search engine on the web that indexes only jobs found on corporate websites throughout the U.S. Updated daily, LinkUp’s job search engine contains nearly 1,000,000 job openings indexed from roughly 25,000 company websites. Because LinkUp does not include any jobs sourced from job boards and does not allow anyone to post jobs directly to the site, the search engine does not include any garbage listings such as job scams, phishing posts, work-at-home-scams, or old listings. And because LinkUp only indexes jobs from a single source (the employer’s corporate website itself), there are no duplicate listings that pollute aggregator sites such as Indeed and Simplyhired. As a result of these entirely unique attributes, not only is LinkUp the highest quality job site for job seekers, but our jobs data is the ‘cleanest’ in the industry, entirely free of the noise that afflicts other jobs data sets.

In November, new job listings on company websites indexed by LinkUp dropped 19% and total job listings fell by 6%. (These percentage are slightly different than the table above which uses an average job count for October, while the table below uses a single, month-end job count for October. If you’re interested in a more detailed explanation, send me an email). Equally as grim, new job listings declined in 49 states and total job listings on company websites declined in 48 states.

In terms of jobs by category, the picture is equally as bleak. New job listings by category also dropped 19% and total job listings fell 6%. Similar to jobs by state table above, 29 of 31 job categories reported declines in new job listings, and 27 of 31 categories showed declines in total job openings.

Based on the LinkUp jobs data from October and November, we are also forecasting a negative number for December’s jobs report. Perhaps obvious but worth pointing out is the fact that a job listing posted on a company’s website in a given month indicates an intent to make a hire which would show up in the BLS numbers the following month, assuming that the job opening was filled. Job openings indexed by our job search engine have stayed open for an average of 27 days throughout 2011, so our jobs data for a given month is very highly correlated to BLS jobs reports for the following month.

Perhaps the only glimmer of hope in our numbers for the past 3 months is the fact that the rate of decline in total job openings on LinkUp, month-over-month, has steadily improved since September (see table at the top of this page). If that trend continues, we might even see a positive LinkUp number for total jobs in December, possibly indicating that the jobs picture might improve in Q1 2012. Or maybe that’s just Lucy goading us into a false sense of hope once again.

LinkUp Jobs Data Indicates That The October Jobs Report Will Be Far Worse Than Expected

Posted on Wednesday 2 November 2011

I’m not typically one who looks for or pays attention to signs from the cosmos, but it was a truly bizarre coincidence that as I was assembling the output from our jobs forecasting model and started to get a sense of what the picture looked like, Cat Stevens’ Trouble began playing on KEXP’s stream. (Seriously – 10:34AM CST, 11/2/11). Troubling, indeed, Friday’s jobs report from the Department of Labor will be “too shocking to see” for the markets. Based on the jobs data from LinkUp in September and October, Friday’s BLS report is going to be the worst since September of 2010 and November’s may be even more dismal.

In October, new job listings in LinkUp’s job search engine (which indexes nearly 1 million jobs from approximately 25,000 company websites throughout the U.S.) dropped 10% and total job listings on company websites fell 2%. Even more troubling, 47 states showed declines in new job listings and 40 states reported declines in total job listings.

In terms of jobs by category, new job listings fell by 9% and total job listings dropped 2% from September. 26 of the 31 job categories tracked by LinkUp showed declines in new jobs in October, while 19 of 31 job categories showed declines in total job listings.

LinkUp is the largest, fastest growing job search engine that only indexes jobs found on corporate websites throughout the U.S. Updated daily, LinkUp’s job search engine includes approximately 850,000 job openings indexed from over 22,000 company websites. Because LinkUp does not allow anyone to post jobs directly to the site, the search engine does not include any garbage listings such as job scams, phishing posts, work-at-home-scams, or old listings. And because LinkUp only indexes jobs from a single source (the employer’s corporate website itself), there are no duplicate listings that pollute aggregator sites such as Indeed and Simplyhired.

Based on LinkUp’s jobs data for the past two months (in September, new job listings declined by 10.9% and total job listings dropped 9.8%), we are forecasting that Friday’s jobs report will show that the U.S. economy lost 47,000 jobs during the month, far worse than the consensus estimate of job growth somewhere between 90,000 to 100,000 jobs. Based on the grim jobs numbers reported here for October, we are forecasting that the U.S. economy will shed another 217,000 jobs in November.

Already “shattered and tossed and worn,” the economy, the markets, and the condition of the average American household, not to mention the 14 million Americans currently unemployed, can hardly take any more misery. Unfortunately, more trouble is on the way.

Friday’s going to be a disaster.

Steve Jobs Dog

Posted on Monday 10 October 2011

It’s been a long time since we’ve created one of our many JobDig dog characters, but…

Despite Mild Gains on LinkUp In September, Jobs Picture Remains Bleak

Posted on Tuesday 4 October 2011

For the 2nd consecutive month, LinkUp is reporting that both new and total job listings indexed from company websites rose from the prior month. In September, new job listings increased from August by 19,095 (5%), while total job listings rose by 36,388 (4%).

LinkUp is the largest, fastest growing job search engine that only indexes jobs found on corporate websites throughout the U.S. Updated daily, LinkUp’s job search engine includes approximately 850,000 job openings indexed from over 22,000 company websites. Because LinkUp does not allow anyone to post jobs directly to the site, the search engine does not include any garbage listings such as job scams, phishing posts, work-at-home-scams, or old listings. And because LinkUp only indexes jobs from a single source (the employer’s corporate website itself), there are no duplicate listings that pollute aggregator sites such as Indeed and Simplyhired.

In September, 33 states showed an increase in new job listings, while 44 states showed an increase in total job listings.

New and total jobs by category also rose in September, by 6% and 4% respectively. 20 of 31 job categories showed increases in new job listings, while 25 of 31 categories showed an increase in total job openings. Technology, healthcare, and retail categories reported the strongest gains during the month.

While the increases in new and total job listings are smaller than the gains reported in August, the rise in new and total job listings indicates that private sector demand for labor appears to be continuing its expansion. Unfortunately, forecasting the extent to which the increases in new and total job openings translate into actual job growth is far murkier and involves a series of assumptions that are becoming harder and harder these days to make with any degree of certainty.

First, we have added back into our calculations the 46,000 Verizon workers that were on strike last month and were subtracted from the BLS’ Establishment Survey data for August. Second, we believe that there is a good chance that the August numbers will be revised when the BLS report is issued on Friday, but we have not factored that into our forecast. And finally, when we average our paired sets of job data for August, the September numbers actually show a decrease in both new and total job listings. This final point is worth a more detailed explanation.

Because LinkUp is constantly adding new companies to our index, we have to ‘normalize’ the data in order to accurately compare one month to the next. To do this, we take the set of companies indexed by LinkUp on the first day of a given month, and compare the new and total job listings from those companies in that month and the next month. The following month, we do the same thing with a new set of companies that includes the employers that have subsequently been added to the index. As a result of this methodology, we get two sets of numbers for each month – the first when we compare a month (t) to the prior month (t-1), and the second when we compare the month (t) to the following month (t+1). In making our jobs forecast each month, we use the average of the numbers for the prior month, but are limited to only one data point in the current month. (With September, for example, we have to rely on one set of data because we have not yet compared September to October).

Taking into account all of these factors, we arrive at the following data table that includes our forecast for both September’s jobs report that will be released on October 7th and October’s jobs report that will be released on November 4th.

Based on the gains we saw in August, when new job listings rose by 6.9% and total job listings rose by 1.2%, we expect that the jobs report on Friday will be slightly better than August’s report (which, again, we have revised up to a positive 46,000 to account for the Verizon strike). We typically see a 30-60 day lag between our data and the BLS numbers which makes intuitive sense given that a job listings on a company website takes time to translate into an actual hire. Unfortunately, the decrease between the average of our two August data points and September’s LinkUp jobs numbers leads us to believe that only 15,000 jobs will be created in October.

Regardless of how close our forecast is to the actual BLS numbers, there is absolutely no doubt that job growth continues to be stuck in neutral, at best, and might actually be heading back into reverse. When looking at the raw data of the number of job openings on LinkUp in 2011, it becomes obvious that demand for labor is slowing down. For the first time ever, the number of job openings indexed from company websites has dropped below the 90-day rolling average.

 

 

If the charts above provide any indication of what’s in store for the next few months or quarters, not to mention the thousands of other gloomy forecasts, the mild anxiety in Washington should be replaced with absolute panic. The ’2nd Great Contraction’ is having a horrendous impact on the economy, 25 million Americans remain out of work or are underemployed, and actual unemployment is north of 16% and probably headed higher. The President’s jobs bill, while better than nothing, is about half of what is required to foster meaningful job growth. Based on extensive analysis from Bridgewater, history has shown that unemployment cannot decline until GDP growth reaches 5%, and in a $15 trillion economy, we need about $750 billion in new spending to get there. The American Jobs Act, with its $447 billion in spending, gets us part of the way there, but it’s not enough. It’s simply not enough. And if Washington doesn’t act soon, and given the abundance of spinelessness and wildly flawed priorities there is no reason to believe it will, my guess is that 2012 is going to be another grim year for the job market.

 

 

 

Despite Dismal August Jobs Report, Private Sector Demand For New Hires Is Growing

Posted on Wednesday 7 September 2011

Last week’s horrendous jobs report, which indicated that the U.S. economy added no jobs in August, was particularly brutal for a number of reasons. First, it was a stark, kick-in-the-gut reminder that we are deep in the midst of what Kenneth Rogoff (Professor of Economics and Public Policy at Harvard) rightly calls the ’2nd Great Contraction.’ This is no ordinary recession, nor even a severe recession. It is, rather, a massive global contraction created by a global economy that was wildly overleveraged for at least a decade. And while we had all hoped that a few months of small but positive job growth might have signaled that we were slowly recovering, August’s report served as yet another clue that we are, most likely, a long way away from solid recovery mode.

Secondly, and far, far less important, was the fact that we missed with our forecast by a mile (or perhaps only by 30 days). Given the steady increases in TOTAL job listings on company websites that we had seen on LinkUp between May and August, combined with increases in NEW job listings in 3 of the past 4 months, we actually increased our already bullish forecast from earlier in August. Unfortunately, the rise in job openings on company websites that we’ve seen all summer has not translated into meaningful job growth, a fact that was echoed by the Job Openings and Labor Turnover (JOLT) report issued earlier today.

As the JOLT report indicated, job openings in the U.S. rose to a 3-year high of 3.2 million in July, but August’s jobs report of zero growth in non-farm payrolls indicates that businesses are simply not hiring at an equivalent pace. (It should be noted, however, that the private sector added 17,000 jobs in August, and if one adds back the striking Verizon workers, that number jumps to 63,000 private sector job gains – still infinitesimally small, but better than none). As big a fail (as my kids would say) as our botched forecast was last Friday, it could also be the case that we simply missed by a month in our assessment.

While LinkUp data is highly correlated to future job growth, there is an obvious lag between when a company posts a job opening on their corporate career portal and when that listing translates into a hire. In 2010, the average lag time was roughly 30 days. In 2011, that lag time has been extended to about 60 days, and it is possible that it is extending further as companies are increasingly cautious and deliberate about their hiring. What cannot be argued is that companies have dramatically increased the number of openings published on their websites.

In August, job openings jumped from 827,000 on August 1st to 863,000 on August 31st. The 90-day rolling average jumped from 798,000 to 826,000.

Since the beginning of the year, the number of jobs in LinkUp’s job search engine has jumped from 578,000 to 863,000 at the end of August.

To be sure, this number has risen in part because we are indexing job listings from approximately 2,000 more company websites today than we were at the start of 2011. But after accounting for growth in the number of companies indexed by the LinkUp search engine, it is still apparent that companies are adding more openings to their company websites.

The number of job openings per company has grown from just under 30 at the beginning of the year to over 40 openings per company at the end of August. While the initial BLS report for August certainly gave us reason to pause, I’ll gladly take the opportunity to double-down on our bullish forecast and make a few additional predictions:

• August’s jobs numbers will be revised upwards in the September report, and might be revised up again in the October report

• The September jobs numbers will be quite positive

• The October jobs report will be even more positive

It simply cannot be the case that 22,000 companies are posting 863,000 vacuous job openings on their corporate websites. The vast majority of those job openings will eventually be filled by newly hired employees, and the jobs reports from the Department of Labor will, at some point, reflect the increase in demand that we’re seeing today at LinkUp. It may take longer than any of us want or believe will be the case, but that’s my story and I’m sticking to it.

 

 

LinkUp Issues Bullish 60-Day Jobs Report; August Will Surprise To The Upside & Job Growth Will Accelerate In September & October

Posted on Thursday 1 September 2011

With each month that unemployment in the U.S. remains stubbornly high, focus on the government’s ‘official’ monthly jobs report grows increasingly intense. Unfortunately, while the anticipation surrounding tomorrow’s report from the Bureau of Labor Statistics has reached new levels, so too has the uncertainty around what the report will say about job growth across the country. Bloomberg is reporting a consensus forecast of 67,000 jobs created in August, but the range of estimates is extraordinarily high, with a low of -5,000 to a high of +150,000. (I can’t help but wonder if that 150,000 is LinkUp’s forecast from August 3rd.) Seeking Alpha reports a slightly higher consensus estimate of 110,000 jobs, but in any case the clear consensus is that job growth remains anemic and will be less than July’s jobs report.

ADP’s numbers would also indicate that job growth in August will come in below expectations, as they reported yesterday that the private sector added only 91,000 jobs during the month. Economists had expected the ADP number to come in around 100,000. And finally, the Conference Board reported that online job demand fell by 163,900 in August, following declines of 217,000 in July and 100,000 in June. It should be noted, however, that the Conference Board is counting job ads on daily newspaper websites and online, pay-to-post job boards such as Monster, both of which are in advanced stages of obsolescence, so I wouldn’t put too much stock in their numbers.

So if everyone is expecting a disappointing number tomorrow, one might ask where the uncertainty I mentioned above is coming from. Right or wrong, the uncertainty is coming from the disconnect between a pessimistic consensus estimate and a very optimistic 60-day jobs forecast from LinkUp, a job search engine that ONLY indexes jobs from corporate websites (Updated daily, LinkUp’s index contains 877,000 job openings from 22,125 corporate websites as of this morning). LinkUp issued its August jobs report earlier today, and based on the growth in new and total jobs in August, combined with what we reported in June and July, we have revised our August forecast that we issued on August 3rd from a positive 150,000 jobs created in August to a gain of 205,000. As well, based on LinkUp’s data, we expect that 275,000 jobs will be added to the U.S. economy in September, and 435,000 jobs in October.

In August, the companies in LinkUp’s job search engine added 419,000 new jobs to their company websites, an increase of 12% from July. Total jobs on LinkUp increased by 7% in August to 979,000. 45 states showed an increase in new job listings on company websites, while 48 showed an increase in total job openings on company websites.

The growth in LinkUp’s new and total job listings is the largest since January of this year, and the 3rd largest since November of 2009. (The percentage gains for August are slightly different than the state table above because we use an average of the two data sets for July in our ‘paired-month’ methodology that accounts for the addition of new companies into the index).

LinkUp is the fastest growing job search engine on the web and indexes only job openings that are published on company websites. The New York Times’ About.com named LinkUp the best job search engine on the web because of our highly unique value proposition for both job seekers and employers. LinkUp does not list any jobs from other job boards, nor do we allow anyone to post jobs directly to the site. Rather, LinkUp’s job search engine currently lists about 877,000 job openings indexed and updated daily from approximately 22,000 company websites throughout the U.S. As a result of this completely unique approach to job listings online, LinkUp’s search engine does not include any old jobs, scam jobs, phishing jobs, or duplicate listings. Nor do we include job listings from staffing companies, headhunters, search firms, or other 3rd party recruiters. It is for these reasons that our jobs data is so highly correlated to future hiring trends.

With the solid gains in total jobs in June, July, and August, we are forecasting that not only will job growth be strong for the next 60 days, but that it will finally start accelerating. (Our forecasts assume a 60-day ‘lag’ between our data for a given month and the impact on the jobs numbers from the BLS).

Predicting the actual unemployment rate in the near future is far more difficult given the massive uncertainty around the labor-force participation rate and ‘Discouraged’ workers, combined with the churn in the labor market that will undoubtedly result when things start to loosen up, but there is absolutely no doubt that the labor market is improving.

It’s about time.

 

 

A Few More Positive Signs In LinkUp’s Jobs Data

Posted on Friday 19 August 2011

Despite the turmoil in the markets, fueled in part by the prospect of a double-dip recession and continued weakness in the jobs market (yesterday’s small increase in initial unemployment claims didn’t help), there continue to be some positive signs in LinkUp’s jobs data. First, based on the increase in both new and total job listings indexed from 22,000 company websites across the U.S. in June, we expect that the BLS report for August will show improvement from July’s better than expected report. Second, we are seeing continued growth in August in the number of jobs being indexed by LinkUp’s job search engine.

This morning, LinkUp’s index (which is updated daily) jumped from 838,000 job openings to a record-high 856,000 job openings. As we’ve mentioned in the past, LinkUp ONLY indexes jobs from company websites, so the jobs are always current and there are no phishing jobs, scam jobs, money-mule positions, work-at-home scams, or any of the other garbage listings that pollute job boards and aggregation sites like Indeed and Simplyhired. And because we index jobs from a single source (the hiring company’s website itself), there are no duplicate listings. (For more information on duplication pollution, click here).

Equally as encouraging, the average number of job openings per company jumped to an all-time high of 40. As an aside, the spike in this chart in May was what helped allow us to make an accurate call regarding July’s unexpectedly positive jobs report. (Our jobs data for any given month is highly correlated to the official jobs report 60 days following that month).

In any event, LinkUp’s jobs data for July doesn’t bode well for September’s jobs report, but perhaps August’s numbers will remain strong and we’ll see a decent jobs report in October. It certainly would be welcomed.