At the end of 2018 and through the first part of 2019, I was very concerned because the number of job openings in the United States had zoomed past 7.5 million, per the U.S. Bureau of Labor Statistics (BLS). For most of the previous years, this number had fluctuated in the 5 million to 6.5 million range. My concern a year ago stemmed from two things: The rapid rise in job openings and the fact that the number of job openings was greater than the total number of unemployed in the country by close to a million people!
Chart courtesy U.S. Bureau of Labor Statistics.
I speculated at that time that we might be facing a manufacturing crisis should those trends continue. A lot can change in a short period of time, though, which is why we watch these numbers closely. The past two months — December and January — have seen a plunge of 938,000 job openings. Some are fearful that this may be a leading indicator of coming economic weakness, or that the job market is running out of steam.
I was relieved to see what I believe to be a correction to an unsustainable situation, but we need to keep an eye on the next couple of months to see if that is, indeed, the case or the beginning of a trend in the opposite direction. Now you know why March 17 is important — that’s the next release date by the BLS of February data.
Another important data point we have been looking at closely is the Institute for Supply Management (ISM) Purchasing Managers Index. This trended downward for all of 2019, from a high of 56.6 to a low of 47.2 in December 2019. A value above 50 is positive. The January 2020 number came in at 50.9, a sharp reversal to trend. February’s 50.1 was somewhat supportive of that reversal but certainly points toward a very modest growth rate.
Lead image: David-Carillet/Adobe Stock
About the author
Paul Sturgeon is CEO of KLA Industries, a national search firm specializing in plastics, packaging, and polymer technology. If you have a topic you would like to see discussed, a company that is growing, or other ideas for this blog, e-mail Paul at [email protected].