A Bizarre Labor Market (with data)

As we start the New Year, we face what is perhaps the most unpredictable and bizarre labor market I can remember. This morning the Conference Board released the December Help-Wanted Online report, which apparently shows a sharp increase in labor demand over the past year in most occupations. However, the BLS employment by occupation data shows no corresponding gain, even in occupations with soaring want ads. Nor does the unemployment by occupation data show any corresponding movements.

I have my own thoughts about what the data means, which I’ll share below. But first let me present the full array of data, by occupation, so you can make your own judgments.

The first column of data in the table below is the Supply/Demand Rate, as calculated by the Conference Board. That indicates the ratio of unemployed workers to ads, so a small number is better. The second column is the change in online ads over the past year, as measured by the Conference Board, so a big number shows that demand has ramped up. The third and fourth columns are the changes in occupational employment and unemployment over the past year, respectively, as measured by the BLS.

The ordering of occupations by supply/demand rate feels more or less right. But when it comes to the link between changes in demand, employment, and unemployment, there’s little consistency. We’ve got occupations with soaring demand and no gains in employment (management, transportation). We’ve got occupations with good supply/demand ratios and no gains in demand (health practioners). And so forth and so on.

My interpretation: The labor market is getting ready for a massive rise in employment over the next year, as companies finally start hiring for positions they’ve been advertising for.

We’ll find out soon.

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