Job openings data may be overstated, Goldman Sachs economist says. Here’s why.

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Job openings data may be overstated as response rates plummet, a new analysis by a Goldman Sachs economist finds.

Goldman economist Ronnie Walker says the response rate for the Job Openings and Labor Turrnover Survey has dropped from roughly 70% a decade ago to just over 30% at the end of last year.

“The decline in the response rate—which has raised questions about the survey’s reliability—unfortunately comes at a time when job openings have become an integral part of assessing labor market tightness and when the focus on monthly prints has never been greater,” says Walker.

That it and of itself does not mean the data is inaccurate, but it does increase the volatility. The JOLTS sample, at 21,000 establishments, is only 3% the size of the nonfarm payrolls survey. Walker says the monthly standard error has increased by 92% relative to the period from 2002 to 2013.

But there are other anomalies. For instance, the layoff and quits rate for the professional and business services industries have mirrored one another, which was not the case before the pandemic. Also, Walker says it looks like companies with flexible working arrangements are underrepresented, which could be biasing JOLTS higher.

“It is difficult to accurately estimate the magnitude of the bias without knowing the difference in response rates between companies that are back in the office and those with flexible working arrangements, but our best guess is that JOLTS would have declined an additional 200-300k over the last year absent the bias,” said Walker.

Walker notes that other measures of job openings, from LinkUp and ZipRecruiter
have fallen more sharply. “We suspect that the ‘true’ level of job openings lies somewhere in the middle of the range implied by JOLTS and alternative measures of job openings,” he said.


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