Wake up to the truth about JOLTS numbers
by John Cruedele, New York Post Are there really millions of job openings in the US economy today? I’ll get to the point: probably not nearly as many as the government contends. Tuesday morning the Labor Department is putting out its JOLTS report, which stands for Job Openings and Labor Turnover Survey. This survey doesn’t have as big a following as the monthly employment report that came out Friday, but JOLTS gives Wall Street hotshots something to trade off and gives TV commentators something to comment on. Plus it has a catchy acronym. And Wall Street traders are suckers for catchy acronyms. Obviously I don’t know ahead of time what the new JOLTS will be. But back on April 7, the Labor Department reported that there were 5.1 million job openings on the last business day of February. That was the last thing JOLTS reported. Impressive? “Millions” always gets people’s attention. Tuesday’s JOLTS report will give a tally of unfilled jobs for March. The first thing you need to know is that the number Labor will come up with is a guess that doesn’t seem to be based on a very big sampling. It says it gets data from 16,400 companies for JOLTS out of the 9 million firms on file for other surveys. I’ll let the statisticians argue whether that’s a large enough sample. I will contend that such a small sample leaves JOLTS open to problems if even a few of those companies list jobs that don’t really exist. This is the same concept as political polling. Call a couple thousand people and decide what the whole country is thinking. The Labor Department’s computer models can take hundreds of phantom jobs, multiply them many times and come up with a scientific guess as to many more nonexistent jobs for the whole job market. Why would companies be reporting jobs that don’t really exist? I’ll have to credit a reader of this column for putting me on the trail of this little lie. Let’s say, the reader explained, that the US government puts out bids for a contract for the Department of Defense. In fact, this reader (who asked not to be identified) says he was actually in charge of one company’s bid for such a contract early this year. That contract would have created 90 to 100 jobs for his company. But there were 19 other companies also bidding. And each of the 20 companies started looking for 90 to 100 workers when it put in its bids because it would need to get up and running quickly if it won. “A simple count of the number of posted jobs would indicate 1,800 to 2,000 openings — when in reality there will only be 90 to 100,” he said. I spoke with this reader over the weekend and he says this sort of thing happens with all government and even private industry contracts. So how many of the millions of JOLTS jobs are being counted doubly, triply, or quadruply? I asked the Labor Department how it weeds out duplicate job postings, but it didn’t answer that specific question. It pointed me to its website that says it considers a job opening a “specific position [that] exists and there is work available for that position.” The job would have to start within 30 days and the company has to be actively recruiting to fill the job. My reader’s example would seem to fit those criteria. So were there really 5.1 million vacant jobs at the end of February? Speaking of Washington, I still haven’t heard from the Republicans on the US Congress Joint Economic Committee about my plan to save the US economy. And the Democrats on that committee merely sent me an email acknowledging my request for a meeting. As I mentioned, my plan calls for loosening the restrictions on private retirement plans like IRAs and 401(k)s, so the trillions now locked up in these accounts can be used to stimulate today’s economy. In a few years, we’ll be celebrating the 10th anniversary of the Great Recession and we will still be waiting for the economic recovery, unless our politicians get the crap out of their ears and start listening to new ideas. Maybe I’ll hear from Congress by the 2018 midterm elections. It’s good that ABC and CBS are highlighting child exploitation in quasi-news shows. But those networks should do a more thorough background check before allowing people to make claims. I can’t say any more because a child could get hurt. But there is an investigation going on in the city right now that could be embarrassing to those two networks. The press made a big deal out of the drop in the unemployment rate during April from 5.5 percent to 5.4 percent. The Labor Department correctly called the difference “essentially unchanged,” but those words don’t fit in headlines. For the record, the jobless rate went from 5.47 percent to 5.44 percent — March rounded off higher, April rounded lower. In other words, essentially unchanged. Go back and read my special Saturday column if you want to know my take on the rest of the April job figures.