The Job Openings and Labor Turnover Survey
The “Job Openings and Labor Turnover Survey” or JOLTS, issued by the Bureau of Labor Statistics (the BLS), is due to be issued today—on Tuesday, February 11. The crucial headline number is job openings.
JOLTS produces monthly estimates of job openings, hires, quits, layoffs and discharges, and other separations. Although there’s a lag of one month in reporting, JOLTS data help measure demand for labor (employers’ need for employees) and track the health of the economy. Job openings are a measure of the “stock” of vacancies. The one-day reference for job openings gives a snapshot of the need for employees in different parts of the economy and allows the BLS to monitor changes over time.
A positive JOLTS report—one that says the number of job vacancies is increasing—will mean that the economy is recovering. Businesses expand as they see higher demand, so hiring activity is on an uptick. This will mean the Fed taper will proceed as the economic environment improves, which means lower bond prices as Fed demand for securities slackens—especially for longer-term Treasuries and agency-backed securities and higher interest rates.
In the last JOLTS report issued in November, there was little change in the number of job openings from October—approximately 4 million in November compared to 3.9 million in October. Taking into consideration weak job creation numbers (74,000 in December and 113,000 in January), we see little reason that this lagging indicator will produce any major shifts. Its impact of bond markets therefore is likely to be tepid at best. To read about an indicator that could produce major shifts in debt markets, read on to Part 5 of this series.