December 5, 2023
December 5, 2023

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How to Read Job Market Numbers

If you were surprised that June continued the job market’s relentless growth—18 straight months, in fact—you shouldn’t have been. It’s not just that we’re on a streak and a pace that has no precedence in history, it’s that if you know how to read and interpret the numbers, much of this should be, if not predictable, at least not a surprise.

So this is a good time to understand how the market is measured and, as a result, how it’s functioning. A blood pressure monitor, EKG machine, and stethoscope not only give you select data; they also tell a story, especially when put together to tell a whole story. Same thing with the job market.

The most common mistake we make when looking at the job market is zeroing in on one indicator: unemployment rate or job creation, for instance, both of which have been sterling. But—and let’s use the unemployment rate as an example—this can move up or down for more than one reason. If more people find work while the total number of people looking for work remains the same, then the rate comes down. But if the number of unemployed people stays the same while other workers stop searching, then the unemployment rate rises, even though there are no additional unemployed workers.

This, of course, directly affects the labor force participation rate, which is an indicator of factors other than jobs. The higher the participation rate, the healthier our overall economy, but external forces—like leaving the workforce to care for children under a remote learning mandate—must be taken into account. More finitely, this has disproportionately affected lower-income women, despite their willingness to work.

That points to another key indicator: open jobs. Never in history have we had so many jobs—11.5 million, at last count—that employers would fill immediately but can’t, due to our labor shortage. It leads to a tremendous advantage for the job seeker, but is skewed due to factors, as we’ve seen, that are extraterrestrial in relation to the market.

That’s why your doctor will ask you questions about your sleeping quality or exercise or work stress, etc. Or if your cholesterol is high but your LDLs are just a little high while your HDL is good and your triglycerides are super low. Then you’ve got a more complete (and better) story. Therefore, when you hear people talking about the job market—and in this midterm election year, there’s going to be an awful lot of that, little of which will be unbiased—and those people are harping on one stat or another, it’s meaningless. Not to mention, as in the medical analogy, there are outside forces. In the case of the job market, those forces are, as we’ve been painfully aware, inflation, supply chain, COVID-19, Russia, climate change, a bad streak in the stock market, and bitter political bipartisanship. One of these alone can cause serious job market tremors, yet the market continues its meteoric rise.

Let’s look at other reasons. The Bureau of Labor Statistics (BLS) issues multiple monthly reports. We’re all familiar with the Jobs Report that comes out the first Friday of every month. But later in the month we get the Job Openings and Labor Turnover Survey (JOLTS) measuring job opening level and rate, as well as rates of hiring, turnover, voluntary quits and layoffs. As long as I’ve observed the job market professionally (25 years), I’ve never seen all of those measurements so uniformly strong simultaneously. Change in one of these measurements usually causes an equal and opposite reaction in another. Not so today, but it’s critical to take all these factors into account before listening to anyone who judges the market by one or two factors.

It’s like the difference between a specialist and a holistic practitioner. Are you looking narrowly at one factor (unemployment, for example) or are you looking at the whole? Need I tell you which approach to take?

My simple advice is to regularly read the BLS Jobs Report, Employment Situation Summary, and JOLTS (which comes out later in the month). Watch this stuff monthly, and sooner or later, you develop a perspective you never had. Come to think of it, isn’t that what your A1C is all about?

The more I think about this analogy, the more I like the current job market.

And my doctor.

Career coach Eli Amdur provides one-on-one coaching in job search, résumés and interviewing.

Reach him at [email protected] or 201-357-5844.

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