Government Job Openings Surge Amid Decline in Private Sector Jobs

Government Job Openings Surge Amid Decline in Private Sector Jobs 

Going into today's JOLTS report, we anticipated that much of the previous month's unexpected surge in job openings—primarily due to a strange spike in government openings—would be revised downward, and that the June numbers would reflect a decrease from the revised May figures.

In hindsight, this did occur, though not to the extent we expected. According to the BLS (Bureau of Labor Statistics), the total number of job openings in June fell by 46K, from an upwardly revised 8.230 million to 8.184 million. While the number of government job openings was indeed revised down, the overall drop was not as significant as anticipated, remaining above the consensus estimate of 8.00 million.

However, the same data manipulation observed last month recurred. A closer look reveals that private sector job openings continued to decline broadly across various sectors, almost entirely offset by a relentless increase in government job openings.

Yes, while May's numbers were revised lower, June saw another unusual rise in government job openings, reaching nearly 1.094 million, driven by a 118K spike in state and local government openings.

Overall, while private sector job openings have dropped to levels seen in late 2018, government job openings are nearing record highs.

Ignoring the data manipulation, the broader jobs report for June shows that the number of job openings was 1.373 million more than the number of unemployed workers (reported as 6.811 million by the BLS), down from last month's 1.581 million and the lowest since summer 2021.

In simpler terms, the ratio of job openings to unemployed workers fell to 1.24 in April, a significant drop from March's 1.30, hitting the lowest level since June 2021 and returning to pre-COVID levels.

But there's more: if we overlook the apparent manipulation in government job openings ("let's hire more TSA agents and deep state officials to make it look like Kamalanomics is working"), the number of quits—a key indicator of labor market strength as it suggests workers are confident they can find better jobs—plunged by 121K in June, the largest drop since July 2023, to just 3.282 million, the lowest since August 2020.

Finally, the most notable detail was the sharp decline in actual hires, which dropped by 314K in June, the largest monthly decrease since February 2023, bringing the total down to just 5.3 million, the lowest level since the depths of the COVID lockdowns.

Ultimately, regardless of the "data," it's important to remember that much of it is estimated. The real number of job openings is likely much lower, with about 70% being guesswork. The BLS admits that response rates for its labor surveys have plummeted in recent years, with the JOLTS report having a record low response rate of about 33%.

In other words, more than two-thirds of the reported job openings are estimated. At a time when it's crucial for Biden (or Kamala) to maintain the illusion of a strong labor market amidst economic turmoil, readers can decide if the near-record number of government job openings, despite crashing hiring and quitting rates, truly reflects a strong labor market or just a debt-funded deep state running amok. We'll know more on Friday.