JOLTS from the BLS

Understanding changes in employment is crucial for investors.  Employment is related to consumption, to consumer confidence, and to GDP.

The Bureau of Labor Statistics provides many reports.  In the Internet age, these are all backed up with online explanations — extensive pieces on methodology.  There is plenty of opportunity for analysts to review the methods, to analyze the data, and to consider the conclusions.

Doing so requires some expertise in economics and research methods.  One problem is that many observers have a focus that is too narrow.

In particular, it is time to pay more attention to the dynamics of the labor market.

The JOLTS Report

Each month the BLS provides a report, the Job Openings and Labor Turnover Survey (JOLTS), that tells us much of what we want to know about the labor market.  We should consider this report in conjunction with the highly-publicized monthly employment situation report.

No one does.  Try a Google search and you will quickly see the neglect by both mainstream media and pundits.

Some Key Facts

The data lag by a month.  This may be one reason for the lack of attention.  There is still plenty to consider.

Here are some of the most important results from the most recent report, released this week:

  • As of the last day of February, there were three million job openings in the US.
  • This is 38% lower than the recent peak in June, 2007.
  • The quit rate was 1.5%, the lowest in the eight-year history of the survey.
  • In the prior twelve months there were 59.2 million separations.
  • Hires were 55.3 million, yielding a job loss of nearly 4 million.


The facts are poorly understood.  You do not see them on CNBC, in the MSM, or on blogs.  Our guess is that few pundits could guess any of these numbers.  It is a neglected subject.

Our guess is that the leading pundits are essentially unware of any of
these facts and could not guess the numbers within an order of
magnitude.  People think that there are no jobs, that no one is
quitting and that no one is getting hired.  They also vastly
underestimate new job creation, which is significant, even in a

The key point is the massive shift in employment — something that is always going on.  If one thinks about this, the arguments about the bete noir of bloggers, the birth/death adjustment, is seen in a better perspective.

There are always millions of people quitting and getting fired.  Millions of others are getting hired.

The story is very negative.  If you consider the number of people losing jobs, and needing to search for new ones, it dwarfs the actual unemployment rate.  Many people are worried about their jobs, and rightly so.  No wonder sentiment is so negative!

There is much more focus on job losses than new jobs.  The former get the news stories.  The latter are basically unreported.

And most importantly —

The market fixation on net job changes ignores the much larger picture of employment dynamics.

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