JOLTS Data Analysis: Job Openings Release On Tap
The Job Openings (JOLTS) data will be released on Tuesday, January 7th. Expectations are for openings to remain largely unchanged at 7.77 million. Last month the reported number was 7.744 million.
While the economy is likely to continue weakening, JOLTS main remain neutral (as forecast) because of the holiday month. With Christmas and New Years smack in the middle of the week in December, it is unlikely the data will truly reflect the current state of the economy.
Having said that, forecasting out further, it is likely the JOLTS data will continue to weaken, falling below the peak in late 2018 and 2019.
High interest rates, economic and policy uncertainty are likely to keep businesses from looking for new employees until they get more factual data on tariffs and consumer spending.
Let's explore exactly how the JOLTS data is calculated.
JOLTS stands for the Job Openings and Labor Turnover Survey. It's a monthly survey conducted by the U.S. Bureau of Labor Statistics (BLS) to measure job openings, hires, and separations.
Here's how it's calculated:
- Survey: The BLS surveys a random sample of 21,000 private, nonagricultural businesses across various industries and sizes.
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Data Collection: Participating businesses provide information on:
- Job Openings: The number of unfilled positions they are actively trying to fill.
- Hires: The number of new employees they have hired during the month.
- Separations: The number of employees who left their jobs due to quits, layoffs, discharges, or other reasons.
- Estimation: The BLS uses this sample data to estimate the total number of job openings, hires, and separations for the entire U.S. nonfarm private sector. They use statistical methods to weight the responses based on industry, size, and other factors to ensure the sample accurately reflects the overall population.
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Reporting: The JOLTS data is released monthly with a lag of a few weeks. It includes various metrics like:
- Job Openings Rate: The number of job openings as a percentage of total employment.
- Hires Rate: The number of hires as a percentage of total employment.
- Quits Rate: The number of employees who quit voluntarily as a percentage of total employment.
- Layoffs and Discharges Rate: The number of employees laid off or discharged as a percentage of total employment.
Key Uses of JOLTS Data:
- Labor Market Analysis: JOLTS data provides valuable insights into the demand for labor, the supply of available workers, and overall labor market dynamics.
- Economic Forecasting: Economists and policymakers use JOLTS data to track labor market trends and make predictions about future economic activity.
- Wage Growth: JOLTS data can also shed light on wage pressures in the economy. A high job openings rate suggests employers may need to offer higher wages to attract workers.
