Once arcane job openings survey becomes darling of Fed’s eye – Reuters

by | Nov 29, 2022 | Jobs

WASHINGTON, Nov 29 (Reuters) – As a Harvard University graduate student in the 1980s, Katharine Abraham tried to fill a hole in U.S. economic data by piecing together an estimate of labor demand, essentially a best guess of the number of open jobs in the country.She drew from a patchwork of data, including surveys some states had conducted, a bit of information from the manufacturing sector, and even a pinch of data from Canada.It was the best available information at the time, she said in a recent interview. But later, in the 1990s as the Clinton administration’s Bureau of Labor Statistics commissioner, she converted that project into one of the most important, if still somewhat obscure, sets of labor market data beyond the monthly U.S. jobs report itself.The Job Openings and Labor Market Turnover Survey (JOLTS), first issued to the public in 2002 and with information dating back to December 2000, is young compared with unemployment statistics that reach back to the 1940s, and was even scuttled by budget cutters the first time Abraham proposed it.But it is having a moment, with a track record now long enough that Federal Reserve Chair Jerome Powell has made the JOLTS job vacancy estimate a touchstone in how he views the labor market and, as a result, the possible course of interest rates.Analysts have taken note.When the survey for October is released on Wednesday, “all eyes will be on the job openings data” and whether an expected decline in openings reaffirms the Fed’s hope that the super tight hiring conditions seen through much of the COVID-19 pandemic are easing, Tim Duy, chief U.S. economist at SGH Macro Advisors, wrote in a note.Reuters Graphics Reuters Graphics’OUT OF LINE’A big surprise in either direction could tilt estimates of the Fed’s expected path of interest rates.The JOLTS vacancy estimate “has been unusually important in this cycle because it has been so out of line,” with roughly two jobs open for each unemployed person, Powell said in a news conference after the end of the central bank’s Nov. 1-2 policy meeting. “We keep looking for signs that … the beginning of a gradual softening is happening … …

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