Last month, after the latest JOLTS report came in fractionally stronger than expected as the Kamala Department of Labor engaged in its usual data manipulation, this time by artificially inflating the number of government sector job openings, we made one prediction: expect a big drop in the next job openings report as the recent surge in government job openings quietly disappears.
Expect big drop in JOLTS job openings as last month's surge in government job openings is revised away https://t.co/0SkQxgdckL
— zerohedge (@zerohedge) July 30, 2024
That's precisely what happened because moments ago, the DOL reported that in July the number of job openings plunged sharply to 7.673 Million - the lowest since January 2021 - from a prior month unrevised June print of 8.184 Million...
... which of course was revised sharply lower to 7.910 Million, which also means that what was originally reported to be a beat to estimates of an 8.00 million print has since been revised to a miss of 7.910 million... but of course one month later nobody cares. Which is precisely how the Biden labor department has been operating all along.
In any case, since Wall Street was expecting was a much higher number based on the unrevised print, today's miss was massive, and it printed below the lowest estimate....
... and was a 4-sigma miss to the median estimate of 8.100 million, a whopping 427K miss in absolute terms. As shown in the next chart, this was the 4th miss in the past 5 months.
As for the driver behind the last months of manipulated JOLTS "beats", which as we showed was the artificially inflated number of government sector job openings, they did - as expected - tumble, from 1.016 million to 924K, while private sector job openings hit a fresh 3.5 year low.
As an aside, keep an eye on construction jobs: the number of job openings in this sector is in absolute freefall, plunging to levels not seen since late 2020.
And here is what may be the most shocking chart of the year: construction jobs openings vs construction jobs. Expect nothing less than an epic implosion of construction jobs in the coming months.
Ignoring the data manipulation, in the context of the broader jobs report, in June the number of job openings was just 510K more than the number of unemployed workers (which the BLS reported was 7.163 million), down from last month's 1.373 million and the lowest since April 2021.
Said otherwise, in July the number of job openings to unemployed dropped to just 1.07, a plunge from the June print of 1.16, the lowest level since May 2021 and now officially below pre-covid levels.
While the job openings data set was a disaster no matter how one looks at it, there was silver lining as hiring finally staged a modest rebound after last month's collapse...
... with quits also rising modestly from the lowest level since mid-2020.
Finally, no matter what the "data" shows, let's not forget that it is all just estimated, and it is safe to say that the real number of job openings remains still far lower since half of it - or some 70% to be specific - is guesswork. As the BLS itself admits, while the response rate to most of its various labor (and other) surveys has collapsed in recent years, nothing is as bad as the JOLTS report where the actual response rate remains near a record low 33%
In other words, more than two thirds, or 70% of the final number of job openings, is made up!
