· 3 min read
There were a lot of jobs up for grabs in December—11 million, according to the Bureau of Labor Statistics’s latest JOLTS report, released on Wednesday. That’s over half a million more jobs than November’s 10.4 million, even as layoffs dominated headlines.
If you’re scratching your head and saying, “huh?” you’re in good company. ZipRecruiter’s chief economist, Julia Pollak, and LinkedIn’s principal economist, Guy Berger, told us they were surprised by this number.
We could try to make sense of this data—demand for hiring could really be on the rise even as *checks notes* CEOs are predicting a recession—or we could call it what Berger said it most likely is: A fluke, the kind of thing that happens with “economic data from time to time.”
So, why talk about it at all?
Berger and Pollak stressed the importance of considering monthly reports like the JOLTS data in context and with caution before hustling back to the boardroom to use it to drive key talent strategy decisions. Here’s how to think like an economist as you’re dissecting HR data.
No pictures, please. While it may be tempting to turn a single snapshot of the economy into a “strong hot take,” Berger suggested looking at the data holistically, perhaps in terms of three-month trends. By doing so, you’ll be more likely to allow natural economic fluctuations to even out, and give agencies a chance to make any necessary revisions—something Berger said occurs often.
For example: “2021 had [initially] shown pretty big ups and downs in job gains,” Berger said. “The new revision just showed it basically being flat…[a] very boring year.”
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If HR leaders don’t wait before reacting, they might make decisions based on “phantom movements” in the economy, said Berger—what appear to be huge fluctuations in job gains when, in reality, the economy is flat. (Face-palm.)
What *can* we act on? Pollak’s takeaway from the latest data—and other leading economic indicators, like the Consumer Board’s Consumer Confidence Index, which published its January data this week—is that the labor market is slowly stabilizing after a tight 2021 and 2022. The number of job openings, she also agreed, appears to be an aberration.
“My view is that the current number of job openings vastly overstates the current strength and tightness of the labor market,” Pollak said, noting the figure differs considerably from what’s reported by Federal Reserve Bank survey data and the number of jobs posted to sites like ZipRecruiter. “Even the more concrete quantifiable measures inside the jobs report, like hires and quits, have…undergone a slow renormalization in recent months,” she said.
If anything, Berger noted, quits seem to be slightly higher than hires, and the Consumer Board, which tracks workers’ confidence in their ability to find a new job, suggests optimism about present economic conditions. This suggests to Berger that right now there are plenty of workers to go around.
But, of course, thinking like an economist means leaving room for uncertainty.
“What I would tell people is: strike a balance…[have] flexibility if the data changes and [try] not [to] overreact,” Berger said.—SV