At this stage of the economic expansion, a lot of attention is being given to job data, especially as world growth has slowed down. I will be dead honest, I was shocked to see the job growth we had last year. It was so off my forecast that I tried to find out what I got wrong. However, after we saw the negative revisions to the previous year’s data and this year’s trend is almost right in line with my forecast of job growth being between 137,000 -157,000, everything looks right to me now.
More on that here: 2019 Job Growth Still Beating My Estimates
With that in mind, I am screaming as high as I can now with this question.
Can the U.S. really have a job loss recession while openings are still way above hires? We didn’t have this happen in the previous cycle, no matter how tight the labor market got, and we didn’t have this happen earlier in this cycle when jobs were growing.
From BLS: JOLTS Report
“The number of job openings was little changed at 7.1 million on the last business day of August, the U.S. Bureau of Labor Statistics reported today. Over the month, hires edged down to 5.8 million and separations were little changed at 5.6 million. Within separations, the quits rate was little changed at 2.3 percent, and the layoffs and discharges rate was unchanged at 1.2 percent. This release includes estimates of the number and rate of job openings hires, and separations for the nonfarm sector by industry and by four geographic regions”
Unemployment Claims are clearly forming a bottom for this cycle, so the downtrend in this data is minimal. I know people have pointed out that jobless claims have had a lot of changes over the decades. Also, a lot of people who lost their jobs last year never even applied for jobless claims. However, I would focus on all the job data together and know the trend is still healthy.
In theory, job openings have to go a lot lower before we really can wave a red flag here. It has to get to a level that we saw earlier in this expansion. Or maybe this time it’s different, perhaps you can have a job loss recession with elevated levels of openings? For me to really believe that I need to see the evidence, hence why I am trying to bring this up right now.
Remember this always, we have a lot older Americans still working ages 51-67, they have about a 7-21 working life span left, and then they die off. Nature is more potent than robots taking all the jobs. Please, keep this mind when you read job openings headlines.
One final note:
The economic throwdown rematch will be happening this year on November 5th, and Dr. Jessica Lautz from the National Association Of Realtors will be part of the panel this year.
Tickers are available now: https://www.eventbrite.com/e/economic-throwdown-the-rematch-tickets-74968347345?aff=ebdssbeac
Logan Mohtashami is a financial writer and blogger covering the U.S. economy with a specialization in the housing market. Logan Mohtashami is a senior loan officer at AMC Lending Group, which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data daily on his own facebook page https://www.facebook.com/Logan.Mohtashami