The Conference Board Experimental Nowcast Update
March 26, 2024
The January 2024 JOLTS data released on March 6, 2024, estimated 8.863 million job openings, seasonally adjusted, and 8.943 million, non-seasonally adjusted, at the national level. This estimation was slightly higher than The Conference Board experimental nowcast, which projected 8.506 million job openings. Alongside this release, annual revisions to the Current Employment Statistics (CES) and updates to the JOLTS seasonal adjustment factors subjected JOLTS data from January 2019 onwards to revision.
Preceding the release, The Conference Board expected upward revisions to the JOLTS data from June 2023 onwards. This anticipation was grounded in robust employment figures and the consistently high volume of job openings that the experimental nowcast projected in the latter half of 2023. However, JOLTS openings, both seasonally and non-seasonally adjusted, were revised downwards for every month of 2023 except November. At the national level, the disparities between pre- and post-revision data were minimal. Refer to the figure below for a detailed comparison of pre- and post-revision data.
JOLTS’ Extended Composite Synthetic Model is the mechanism by which JOLTS’ openings estimations across states and industries are released. Changes in seasonal adjustment factors made minor adjustments to the JOLTS data series from January 2019 to January 2024. However, payroll employment is a main input into this model, thus revisions to it have a spillover effect on job openings estimations. Revisions to nonfarm payroll employment have historically averaged +/- 0.3% of total nonfarm employment in the same year. The revisions released in February 2024 impacted JOLTS data from January 2023 to December 2023, and were similar in size and scope to historical changes.
Nonfarm payrolls are usually revised relative to March of the most recent year. In March 2023, total nonfarm payroll employment was revised downwards by 266,000 (-0.2%) seasonally adjusted and 187,000 (-0.1%) non-seasonally adjusted, which shifted the entire series from January 2023 to December 2023 downward as well. The downward revision had the greatest effect on the Transportation and Warehousing (-163,200 or -2.5%) and professional and business services industries (-127,000 or -0.6%). These downward revisions in employment explain the downward revisions to job openings on aggregate, as shown above, and by strata, as seen in the manufacturing and retail trade sectors below.
Divergences in estimations between JOLTS and our experimental nowcast may be due to fundamental differences in their respective data collection methodologies. These discrepancies are manifest at a more granular level of analysis. The experimental nowcast overstated, in comparison to JOLTS, the magnitude of job openings within the Manufacturing and Retail Trade sectors from June 2023 to December 2023. However, the experimental nowcast also exhibited considerably less volatility in historical estimations across strata (e.g., State, industry, MSA) than even seasonally adjusted JOLTS estimates. With an increasing non-response rate in the JOLTS program, it could be the case that the true value of job openings on aggregate, and stratified, lies somewhere in between the experimental nowcast and the JOLTS release.
The Conference Board will continue to monitor JOLTS’ releases and refine the experimental nowcast to discern genuine trends from non-economic fluctuations in job openings.
