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Will this month’s JOLTS report hold any surprises for investors?

Phalguni Soni

How will consumption shape investments after the payrolls report? (Part 6 of 12)

(Continued from Part 5)

What is the JOLTS report?

The Job Openings and Labor Turnover (or JOLTS) is issued by the Bureau of Labor Statistics (or BLS). The report includes 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 the 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.

The Job Openings and Labor Turnover Survey, or JOLTS, for February will be issued by the Bureau of Labor Statistics (or BLS) on Tuesday, April 8.

Highlights from January’s report

The headline number, job openings, came in at 3.974 million for January—slightly higher compared to December’s revised figure of 3.914. The hires rate (3.3%) and separations rate (3.2%) also showed little change on a month-on-month basis. Total hires and separations in January stood at 4.5 million each, showing little change from December. Professional and business services and educational services reported increases in the total number of hires. The quitting rate, at 1.7%, also showed negligible change for total non-farm payrolls. Job openings increased in healthcare and social assistance, arts, entertainment, and recreation, and also in the Western region, while the retail job environment was challenging, with the number of job openings and hires declining for the sector.

Major retailers include S&P 100 Index (OEF) components Wal-Mart (WMT), Target (TGT), and Costco (COST). Both Wal-Mart (WMT) and Target (TGT) have announced job cuts this year. Wal-Mart (WMT) announced 2,300 job cuts at its Sam’s Club segment in January, although the retailer plans to open another 15 Sam’s Club stores this year. Brick-and-mortar retailers are facing heat from e-tailers like Amazon.com (AMZN), as the latter have a lower operating cost structure and can lure shoppers with lower prices.

Job openings, hires, and separations data have been revised from December 2000 forward to incorporate annual updates to the Current Employment Statistics employment estimates and the Job Openings and Labor Turnover Survey (JOLTS) seasonal adjustment factors. The figures in this report represent the revised numbers.

Employment statistics are extremely important economic indicators. The next part of this series will discuss their impact on both debt (AGG) and equity markets (OEF). We’ll also preview another employment indicator due to release this week, initial jobless claims. To find out about the impact of JOLTS and jobless claims reports on fixed income (AGG) and equity investors (OEF), read on to Part 7.

Continue to Part 7

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