Realist, not conformist analysis of the latest financial, business and political news

US Job Openings, A 7.3 Million Record – A Record For The Whole 19 Years We’ve Collected The Number

That this or that is a record is interesting, possibly even amusing. We would expect that whatever the record is, a high or low temperature, wind speed, number of hot dogs eaten in the Coney Island July 4th contest, to increase over time. Just whatever variability we do see in it, we’d expect the extremes to be wider the longer we’ve been collecting the number.

Think on it, temperature variation over three centuries is going to be greater than that over one decade. At least, that’s the way we would bet. Note what this means for us though, the announcement of a new record temperature doesn’t in fact tell us that climate is changing, that we’ve a structural change going on. It could indeed just be that normal variability that we’re recording over that longer period of time. We would need other measurements to distinguish between the two causes.

So, here we’ve got the news that US job openings are at an all time high of 7.3 million. Whoop Whoop! right, and re-elect Donald Trump right now.

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]The Labor Department said Tuesday that job openings jumped 2.4 percent in December to 7.3 million.[/perfectpullquote]

Well, yes, except, as the reports do note:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]That’s the highest level since the government began keeping track in 2000.[/perfectpullquote]

Umm, well, yeah:

It’s not a long collected statistic

The thing is, the probability of any one number being the record high in a series of 20 of them is some 5%. Which is the boundary we normally use in statistics to divide between the totally random outcome and something that might need explaining. So this isn’t a terribly powerful statistic as a statistic.

It’s also true that this is pretty much the first proper boom we’ve had since we started collecting this statistic. The job market was already weakening from the 1990s boom by the time we started this in 2000.

So, yes, there’s some validity to this number, it’s evidence that we’re where we think we are, we’re in an economic boom. It’s a record number for this statistic but that’s pretty weak beer to be honest, given what a short period of time we’ve been collecting it. The number of jobs out there is important, yes, but the “record” here, that’s a matter for amusement more than anything else.

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5 years ago

Of course, this is politics not economics.

5 years ago

Yes, unless you are looking for a job, in which case the job openings is a very encouraging number. More importantly, that “record” comes in the face of large numbers of people reentering the workforce. The workforce now has 163 million workers compared to 12/2000’s number of 143 million (January’s workforce number was down slightly from December – a warning of things to come?). One component of GDP is the number of people working; the number of people employed has shown a similar increase (157 million working compared to 12/2000’s 138 million), with predictable benefits to GDP. As an aside,… Read more »

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