Employment Forecast – Jobs. Trends. Insight.

April 2010 BLS Nonfarm Forecast: +220,000

By Charles Thibault on April 28, 2010 in BLS Nonfarm Employment, Hiring Demand Indicators.

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WANTED Technologies expects the Bureau of Labor Statistics will report Nonfarm Employment gains of 220,000 workers for April 2010. The BLS Employment Situation for April 2010 is scheduled to be released on May 7, 2010, at 8:30 A.M. Eastern Time.

The BLS reported employment gains of 162,000 nonfarm workers for March of 2010, after offsetting employment changes of -14,000 and +14,000 workers for January and February.

This month's forecast is based on the following:

Hiring Demand – the number of online job postings – has grown since last month. Compared to the previous month, there were 10,000 more online job ads on major national job boards (Monster, CareerBuilder, HotJobs). This was a 1.8% increase on a seasonally adjusted basis. In other words, hiring, as expressed through the number of online job ads, has been rising at a slow and steady pace, presaging continued employment gains.
Although Craig's List is NOT included in our forecasting models, it experienced a "level-shift" in January of this year which has held up so far. In 2009 the number of job postings on Craig's List was around 170,000, weekly. More recently that number has hovered around 210,000 new job ads a week. Craig's List is the largest "job board" by volume in the United States and is a good indicator of demand for low salary or hourly jobs.
Over the period covering March 13 to April 12th, the 4-week moving average count of new Unemployment Insurance Claims has fallen by about 4,000. Over a 4-week cumulative period that means that 16,000 fewer people have filed an unemployment insurance claim.
Since February 8th the S&P 500 index has gained 15%, suggesting that others share in this positive expectation.
Our forecast for this month also includes the hiring of an estimated 66,000 Census workers. Most of the US Census Bureau hiring will be effectuated in May of this year, where we can expect (temporary) employment gains of 350,000 nonfarm workers due to the decennial census alone.

March 2010 BLS Nonfarm Forecast: -52,000

By Charles Thibault on March 23, 2010 in BLS Nonfarm Employment, Unemployment Insurance Claims.

WANTED Technologies expects that the Bureau of Labor Statistics will announce a drop in US Nonfarm Employment of 52,000 workers for March 2010.

Last month, the BLS said that US Nonfarm Employment dropped by 36,000 workers.

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This month's forecast is based on the following labor market dynamics:

Particularly meaningful for this month's forecast are offsetting changes in new Unemployment Insurance Claims:
- There were consecutive increases of 32,000 and 24,000 new UI Claims for the weeks ending February 13th and February 20th 2010. The week ending February 20th had a total 498,000 new UI claims. The BLS measures employment on the 12th day of each month, so technically the report ending February 13th can be excluded since it overlaps with February's employment count. However, it still provides a signal on what happened in the labor market and is a close straddle on the March employment reporting date.
- More recent UI claim reports have been positive. New Claims fell by 30,000 for the week ending February 27th, settling at 468,000. In the past two weeks UI Claims have improved marginally as well, falling to 462,000 and 457,000 for the weeks of March 6th and March 13th. This is a good signal as it indicates continued positive momentum in the labor market. The 4-week moving average has returned to levels around 470,000 and will fall precipitously when the value of 498,000 drops out the 4-week window used this week's release.
- The 4-week moving average now stands at 471,250. This is an increase of 3,500 claims relative to the 4-week moving average of 467,750 seen a month ago. Over a 4-week period, that means a cumulative total 14,000 more new Unemployment Insurance Claims.
New online job ads on major national job boards grew by 9,500 ads in March. This is a slight softening after 4 consecutive months of improvements in the range of 12,000 to 14,000 online job ads. Changes in Employment depend two variables – separations and hires – and we've discussed in a previous post how it's possible to have both growing hiring and falling employment.

Both of these factors combined – a slight increase in new UI claims, and a slight softening of labor demand – lead us to forecast a drop in US Nonfarm Employment of 52,000 workers. This is a relative worsening of 16,000 workers compared to last month's drop of 36,000 workers. There was no surge in Hiring Demand that would lead us to forecast employment gains.

Employment changes will fluctuate around zero as the economy and labor market have reached a steady-state equilibrium.

Over the past three years, the average difference between the BLS's first preliminary data release and its third and final data release has been 78,000 workers a month. The BLS's first preliminary report is treated as a forecast of its third and final report. The WANTED historical standard of error of forecast is 84,000 workers per month, which is consistent with the BLS's average error to its own data.

The BLS will release its Employment Situation Summary for March on Friday, April 2, 2010, at 8:30 a.m

December BLS Nonfarm Forecast: up 75,000

By Charles Thibault on December 28, 2009 in BLS Nonfarm Employment.

The number of new online job postings continued on its positive trend in December, supporting continued improvements in the labor market situation. Based on improving Hiring Demand and positive signals from several different labor market variables, WANTED Technologies expects the BLS will announce December Nonfarm Employment gains of 75,000 workers. The BLS will release the Employment Situation Summary on Friday, January 8^th at 8:30am.

This would be the employment gain since the recession started 23 months ago. Last month, the BLS estimated that nonfarm employment shrunk by only 11,000 workers. The graph below shows year-over-year percent changes in Hiring Demand (new online job ads) and month-over-month changes in US employment (nonfarm). The blue dot represents this month's forecast from WANTED:

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Our forecast of an improvement of 75,000 in Nonfarm Employment is based on the following:

Employment Services Industry Data Signals December Employment Growth

By Charles Thibault on December 9, 2009 in Staffing Industry.

The Employment Services industry has been growing over the past 4 months, according to data from the Bureau of Labor Statistics. This is important because over the past 20 years, the Employment Services industry has lead the rest of the economy both entering and exiting new business cycles – by about 4 months. Recent gains in the Employment Services industry means that US Nonfarm Employment could grow in December.

Movements in the Employment Services industry lead the rest of the economy because of the nature of temporary workers. When the economy is in a downturn, it's easier to end a temp worker's contract that to lay someone off. In an economic upturn, it's less risky to hire someone first as a temp, with the possibility of permanent employment to follow.

The graph below shows employment changes over the past 11 months in the Employment Services industry, the Temporary Help Industry sub-category, and total US Nonfarm Employment. (Changes to Employment Services employment and Temporary Help Services employment are on the left axis, and the change in Nonfarm Employment is on the right axes).

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Those Pesky Revisions – The Effect of BLS Revisions on NonFarm Forecasts

By Charles Thibault on December 7, 2009 in BLS Nonfarm Employment.

There were two important pieces of information in this month's BLS Employment Situation Summary. First, Nonfarm Employment dropped by only 11,000 – much better than Consensus Estimate that sat at -100,000 and our forecast of -155,000. Second, employment drops from the two previous months were revised upwards: 80,000 fewer people were out of work in September than originally reported, and 79,000 fewer people were out of work in October than originally reported. Together, this month's employment contraction of only 11,000 workers and those two positive revisions of about 80,000 put the US economy much closer to employment growth than what was thought just last week.

That's great news for the economy at large, but bad news for professional forecasters. BLS revisions have a direct impact on "what our model would have said given this new information". Our forecast for November, given the revised data in this month's report, would have been a drop of 79,000 nonfarm workers instead of a drop of 155,000.

Most forecasting models will include lagged values of the dependent variable, in addition to any proprietary or public information forecasters have access to. WANTED's forecasting model, for example, includes Nonfarm Employment, Unemployment Insurance Claims, and our Hiring Demand Indicators (number of new online job ads posted on the internet).

The table below shows the information available at the time of our forecast, the information available in the most recent Employment Situation Summary, and our forecasts based on those two different sets of data:

Month	Available BLS Data	Revised BLS Data	Change
August	-154	-154	0
September	-219	-139	80
October	-190	-111	79
November WANTED Forecast	-155	-79	76

This "relative difference" in our forecast is almost exactly the same as the BLS's own revisions (76 vs. 79/80).

November 2009 BLS Nonfarm Employment Forecast: Down 155,000

By Charles Thibault on November 20, 2009 in BLS Nonfarm Employment.

Based on improving labor market trends, WANTED Technologies predicts that the BLS will announce a drop of 155,000 Nonfarm workers in November.

This is a relative improvement of 35,000 job losses compared to October's drop of 190,000.

The BLS Employment Situation for November is scheduled to be released on Friday, December 4, 2009.

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Three of the four major labor market variables suggest slowing of job losses, but none of them provide the hope of job gains this month:

Over the 4-week period leading up to November 12th, there were 73,000 fewer new Unemployment Insurance Claims compared to the previous month. This variable yields a relative improvement of 43,000 job losses once it is entered into our econometric model. Last month the drop in new UI Claims was 88,000 which lead to a relative improvement of 29,000 in the Employment Situation Summary report.
Job losses have subsided at an average rate of 70,000 workers per month since January. The relative improvement in last month's report was only 29,000 workers (below trend).
Hiring Demand has been trending upwards since March, at an average rate of 2.1% per month. On the three major national job boards (Monster, CareerBuilder, Hotjobs), Hiring Demand has grown at an average rate of 1.4% per month since March as well. However, Hiring Demand did not grow significantly on a seasonally adjusted basis in October/November. Seasonal movements usually drive up Hiring Demand by 7% in October relative to its trend (which is how seasonal adjustment factors are calculated). This year, Hiring Demand stayed exactly on trend. Of all four labor market variables examined, Hiring Demand is the only one that produces a negative relative improvement compare to last month's report (-12,000).

Source: WANTED Analytics

There is still a gap between the number of people being hired and the number of people being separated from their jobs, according to the BLS' Job Openings and Labor Turnover Survey. 300,000 more people were separated from their jobs in September than were hired. That gap, however, has been shrinking at an average rate of 60,000 workers per month since March. Transposing that trend to November puts the 'hiring gap' at 180,000.

October 2009 BLS Nonfarm Employment Forecast – Down 224,000

By Charles Thibault on October 25, 2009 in BLS Nonfarm Employment.

Based on improving labor dynamics, WANTED Technologies expects that the Bureau of Labor Statistics will announce a job loss of 224,000 workers for October 2009.

Last month, the BLS reported nonfarm employment losses of 263,000.

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Several factors contribute to another negative employment report from the Bureau of Labor Statistics, but with fewer job losses:

There has been a 'positive trend' in job loss figures over the past 8 months. Nonfarm job losses have diminished an average 72,000 a month over the past 8 months.

There were 88,000 fewer new UI Claims over the past month.

More people are being separated from their jobs than are being hired into a new one, according to the BLS's Job Openings and Labor Turnover Survey. However, the gap between the number of Hires and Separations has been shrinking by 62,000 workers a month over the past 8 months, and was -198,000 in August 2009.

Hiring Demand has grown an average 0.7% a week over the past 8 months. However, the number of online job ads slipped by 0.5% on a seasonally adjusted basis over the mid-month to mid-month period on major national job boards. The number of online job ads did not pick up as much in the second half of September as we would have been expected. Had there been a spike in the number of online job ads, WANTED would have forecast fewer job losses.

The Employment Situation for October is scheduled to be released on Friday, November 6, 2009, at 8:30 a.m. (EST).

Finance Down 8,800 – September 2009 BLS Preliminary Report

By Juli Morris on October 2, 2009 in BLS Nonfarm Employment, Business/Finance.

The Bureau of Labor Statistics today reported a loss of 8,800 jobs in the Finance and Insurance sector for September, following a revised loss of 18,200 jobs reported by the BLS for August. Losses of 7,400 jobs in the Banking sector were the largest component of the overall employment decline.

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The Financial Services Hiring Demand Indicator–a measure of year-over-year change in online job advertising– rose for the fifth consecutive month, from -27 percent in August to -25 percent in September.
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Transportation Down 15,400 – September 2009 BLS Preliminary Report

By Juli Morris on October 2, 2009 in BLS Nonfarm Employment.

The BLS' preliminary report indicates a loss of 15,400 jobs in the transportation and warehousing industry in September, after losing a surprisingly low 300 jobs in August (revised upward from the preliminary estimate of 1,000). WANTED Technologies' Hiring Demand Indicator (the yellow line in the chart below) for Transportation showed a strong uptick in September, continuing the overall upward trend from its three-year low in March 2009.

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The Transportation Hiring Demand Indicator–a measure of year-over-year change in online job advertising–has risen from a three-year low of -61 percent in March to -11 percent in September.

For more charts, graphs and forecasts, visit our BLS Forecast page.

Health Care Up 19,200 – September 2009 BLS Preliminary Report

By Juli Morris on October 2, 2009 in BLS Nonfarm Employment, Health Care.

According to today's preliminary report by the BLS, the health care sector gained 19,200 jobs in September. While still a positive report, this is the fourth consecutive month of declining gains. WANTED Technologies' Hiring Demand Indicator (the yellow line in the chart below) for Health Care also showed another slight decline in September.

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The Health Care Hiring Demand Indicator–a measure of year-over-year change in online job advertising–showed a slight decrease this month, but remains flat since the strong uptick last quarter from -27 percent in April to -17 percent in May. The trend in Hiring Demand in Health Care had been moving steadily downward from a peak it reached in June 2007 prior to the onset of the recession in December 2007, reaching a bottom which appeared to occur in the first quarter of 2009.

For more charts, graphs and forecasts, visit our BLS Forecast page.

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