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Macro Minute

January 11, 2022

Strong Start for Job Openings in 2022

Last week, the Bureau of Labor Statistics announced that total job openings fell slightly to 10.6 million in November versus 11.1 million in October, with the job openings rate dropping to 6.6 percent from 7 percent. (Job openings are reported as part of the JOLTS survey, which is distinct from the monthly employment reports.)

Though softening, these numbers remain elevated and indicate labor demand remained historically strong at the close of November. By the end of the month, there were 0.7 unemployed persons per job opening, remaining at a record low for the third straight month.

While nonfarm payrolls increased only modestly in December, by 199,000, the JOLTS data bode well for upcoming employment reports — a conclusion supported by high frequency data, as we explore in this post.

"Across all the states and the District of Columbia, the high frequency data point to labor demand remaining strong across the Fifth District as we kick off the new year."

 

Because omicron emerged only in the last couple days of November, last week's JOLTS report does not reflect the full impact of the latest COVID-19 outbreak on labor demand. For that, we can once again look to high frequency data to get a sense of how the level of job openings may have changed in December 2021 — the first full month of omicron.

In Figure 1, we plot total private sector job openings from the JOLTS report versus a high frequency measure of job postings from the Indeed Hiring Lab. The Indeed US Job Postings Tracker is a seasonally adjusted metric of job postings on Indeed.com that compares the level of job postings to a pre-pandemic baseline of Feb. 1, 2020, indexed to 0. To facilitate comparison, we report total seasonally adjusted private sector job openings from the JOLTS report in terms of percentage growth versus January 2020.

Figure 1

Figure 1 shows that the Indeed job postings tracker tracks the JOLTS private sector job openings measure reasonably well and points to a strong year-end finish for labor demand. The Indeed measure doesn't track JOLTS movements perfectly. During the 2020 delta wave starting in August, growth in JOLTS job openings essentially plateaued, while the Indeed measure continued to improve through the end of the year. But on a level basis, the two measures gave a roughly similar picture of labor demand. On average, between September and December 2020, Indeed job postings were down 6.3 percent versus the pre-pandemic baseline, while the JOLTS-based measure was down 4.3 percent versus the pre-pandemic baseline. A simple regression of JOLTS private sector job openings on Indeed data through Dec. 31 suggests private sector job openings rose to 10.9 million in December.

Finally, Indeed job postings data are available at the state level and are shown in Figure 2 below. Across all the states and the District of Columbia, the high frequency data point to labor demand remaining strong across the Fifth District as we kick off the new year.

Figure 2


Views expressed in this article are those of the author and not necessarily those of the Federal Reserve Bank of Richmond or the Federal Reserve System.

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