This is an excerpt from our most recent Economic Outlook report. To access the full PDF, please click here.
I. Introducing Indeed Job Posting Data as a Key Macro Indicator
On Dec. 15th, 2022, the public St. Louis Federal Reserve (FRED) macroeconomic chart and data system began to post 452 lists of real-time updated Indeed Hiring Lab data.
The St. Louis Fed FRED system is the ‘go-to’ macro data portal for all U.S. economists.
A. Why is Indeed-supplied job posting data important?
The U.S. labor market’s unprecedented post-COVID performance continues. It drives the Fed’s data-dependent policy decision-making; on setting its short-term Fed Funds rate.
One major factor keeping the U.S. economy, in the face of 500 basis points of Fed Funds tightening, from not falling apart into a major real growth rate recession is the unusual excess demand strength maintained by current U.S. labor markets.
What the Fed is doing — in this peculiar post-COVID rate hiking cycle — is basically whittling down on current excesses seen in U.S. job postings.
Successful U.S. job market demand management supports the case for a ‘soft’ growth landing.
Success here by the Fed should reduce final spending hailing from job-driven incomes, which lowers pressure on final goods and services prices, which generates the unwelcome high U.S. Consumer Price Inflation (CPI) rate.
If you remember your economics textbook lesson, a lack of policy rate success here by the Fed would be termed a ‘wage-price’ spiral.
In turn, the Fed Funds policy rate — crucially — will affect both the real annual growth rate of the U.S. (and world) economy, and the performance of the U.S. stock and bond markets.
Those two macro connections make this Indeed U.S. (and selected developed country) job market data vital — to this current Federal government, to observing economists, to stock & bond investors, and to traditional banking systems worldwide.
To wit, the Indeed organization collects the most comprehensive U.S. internet job-posting data.
B. As provided by Wikipedia, next is needed background on Indeed, as a company
“Indeed is an American worldwide employment website for job listings launched in November 2004. It is a subsidiary of Japan's Recruit Co. Ltd. and is co-headquartered in Austin, TX and Stamford, CT with additional offices around the world.”
“As a single-topic search engine, its central functionality is also an example of vertical search. Indeed is currently available in over 60 countries and 28 languages.”
“In October 2010, Indeed.com passed Monster.com to become the highest-traffic job website in the United States.”
“The site aggregates job listings from thousands of websites, including job boards, staffing firms, associations, and company career pages. They generate revenue by selling premium job posting and resume features to employers and companies hiring.”
“In 2011, Indeed began allowing job seekers to apply directly to jobs on Indeed's site and offering resume posting and storage.”
C. According to Indeed, here is how their job posting indices function
“The Indeed Job Postings Index, is a daily measure of labor market activity that is updated and will continue to be released weekly.”
“Covering seven national markets in the U.S., Canada, United Kingdom, Ireland, France, Germany, and Australia, the Indeed Job Postings Index meets one of Hiring Lab’s primary goals: produce high quality and high frequency labor market metrics using Indeed’s proprietary data.”
“The Indeed Job Postings Index is set to 100 on February 1st, 2020, and this effectively provides a uniform level shift of 100 to the existing Job Postings Tracker across all time points. The Job Postings Tracker measured the percent change in postings from February 1st, 2020.”
“For example, if the Job Postings Tracker were 40%, the corresponding Indeed Job Postings Index on the same date would be 140.”
“Additionally, we are now including year-over-year and month-over-month percent changes in the Indeed Job Postings Index as part of our data portal on hiringlab.org/data and on our GitHub page. Month-over-month changes are calculated as 28-day (4-week) differences to control for day of week.”
“As Covid-19 fades from the global labor market discussion, moving to an index better reflects current economic conditions. The Indeed Job Postings Index allows us to compare job postings more naturally across flexible date ranges as opposed to comparing to the pre-pandemic baseline.”
“It also places Indeed’s job postings metric in a broader class of macroeconomic indexes such as the Case Shiller Index that measures house price appreciation and the Consumer Price Index that measures inflation.”
II. Inspecting Broad Indeed Data on the U.S., California and Abroad
A. U.S. data
In the first chart I have provided below, you can see that U.S. job posting peaked on Indeed in early 2022. Their broad U.S. index made it to 164 on Dec. 31st, 2021.
To start 2023, this index was around 150.
On April 6th, 2023? It is 133.
The rate of decline has also speeded up notably in the first 4 months of 2023. Confirm that below.
However, U.S. job postings are still 33% higher than the pre-COVID Feb. 2020 moment. That implies job market conditions are still tight. That aggregate U.S. labor supply-demand tightness supports U.S. wages.
Image Source: Zacks Investment Research
What about the usual bellwether state of California? This time around, given the dominance of Tech in the California economy, it is not likely to serve as a barometer for the rest of the country, which is less dependent on Tech. However, while the rate of Indeed job posting decline is steeper in CA, its inclination is consistent with the broad U.S. Indeed data. I show you that, below.
Image Source: Zacks Investment Research
Consistent with the U.S. peak, the California Indeed job posting index did make a peak at 162 at the end of Dec. 2021 too. On April 7th, 2023, California’s Indeed index is 116. In sum, California Indeed job posting data is moving in sync with the U.S. data. Yet, the California data has declined to an even lower level. The state is still above the 100 Feb. 2020 pre-COVID level though.
With a move from 137 to 116 (21 ticks down) accomplished in a little over 4 months-time, let’s go with 5 ticks a month. California will be below its pre-COVID Indeed job posting level in July 2023.
Hmmmm. A July 2023 date is also when the Fed likely has just paused rate hiking.
Image: Shutterstock
Lessons to Capture from Job Postings on Indeed
This is an excerpt from our most recent Economic Outlook report. To access the full PDF, please click here.
I. Introducing Indeed Job Posting Data as a Key Macro Indicator
On Dec. 15th, 2022, the public St. Louis Federal Reserve (FRED) macroeconomic chart and data system began to post 452 lists of real-time updated Indeed Hiring Lab data.
The St. Louis Fed FRED system is the ‘go-to’ macro data portal for all U.S. economists.
A. Why is Indeed-supplied job posting data important?
The U.S. labor market’s unprecedented post-COVID performance continues. It drives the Fed’s data-dependent policy decision-making; on setting its short-term Fed Funds rate.
One major factor keeping the U.S. economy, in the face of 500 basis points of Fed Funds tightening, from not falling apart into a major real growth rate recession is the unusual excess demand strength maintained by current U.S. labor markets.
What the Fed is doing — in this peculiar post-COVID rate hiking cycle — is basically whittling down on current excesses seen in U.S. job postings.
Successful U.S. job market demand management supports the case for a ‘soft’ growth landing.
Success here by the Fed should reduce final spending hailing from job-driven incomes, which lowers pressure on final goods and services prices, which generates the unwelcome high U.S. Consumer Price Inflation (CPI) rate.
If you remember your economics textbook lesson, a lack of policy rate success here by the Fed would be termed a ‘wage-price’ spiral.
In turn, the Fed Funds policy rate — crucially — will affect both the real annual growth rate of the U.S. (and world) economy, and the performance of the U.S. stock and bond markets.
Those two macro connections make this Indeed U.S. (and selected developed country) job market data vital — to this current Federal government, to observing economists, to stock & bond investors, and to traditional banking systems worldwide.
To wit, the Indeed organization collects the most comprehensive U.S. internet job-posting data.
B. As provided by Wikipedia, next is needed background on Indeed, as a company
“Indeed is an American worldwide employment website for job listings launched in November 2004. It is a subsidiary of Japan's Recruit Co. Ltd. and is co-headquartered in Austin, TX and Stamford, CT with additional offices around the world.”
“As a single-topic search engine, its central functionality is also an example of vertical search. Indeed is currently available in over 60 countries and 28 languages.”
“In October 2010, Indeed.com passed Monster.com to become the highest-traffic job website in the United States.”
“The site aggregates job listings from thousands of websites, including job boards, staffing firms, associations, and company career pages. They generate revenue by selling premium job posting and resume features to employers and companies hiring.”
“In 2011, Indeed began allowing job seekers to apply directly to jobs on Indeed's site and offering resume posting and storage.”
C. According to Indeed, here is how their job posting indices function
“The Indeed Job Postings Index, is a daily measure of labor market activity that is updated and will continue to be released weekly.”
“Covering seven national markets in the U.S., Canada, United Kingdom, Ireland, France, Germany, and Australia, the Indeed Job Postings Index meets one of Hiring Lab’s primary goals: produce high quality and high frequency labor market metrics using Indeed’s proprietary data.”
“The Indeed Job Postings Index is set to 100 on February 1st, 2020, and this effectively provides a uniform level shift of 100 to the existing Job Postings Tracker across all time points. The Job Postings Tracker measured the percent change in postings from February 1st, 2020.”
“For example, if the Job Postings Tracker were 40%, the corresponding Indeed Job Postings Index on the same date would be 140.”
“Additionally, we are now including year-over-year and month-over-month percent changes in the Indeed Job Postings Index as part of our data portal on hiringlab.org/data and on our GitHub page. Month-over-month changes are calculated as 28-day (4-week) differences to control for day of week.”
“As Covid-19 fades from the global labor market discussion, moving to an index better reflects current economic conditions. The Indeed Job Postings Index allows us to compare job postings more naturally across flexible date ranges as opposed to comparing to the pre-pandemic baseline.”
“It also places Indeed’s job postings metric in a broader class of macroeconomic indexes such as the Case Shiller Index that measures house price appreciation and the Consumer Price Index that measures inflation.”
II. Inspecting Broad Indeed Data on the U.S., California and Abroad
A. U.S. data
In the first chart I have provided below, you can see that U.S. job posting peaked on Indeed in early 2022. Their broad U.S. index made it to 164 on Dec. 31st, 2021.
To start 2023, this index was around 150.
On April 6th, 2023? It is 133.
The rate of decline has also speeded up notably in the first 4 months of 2023. Confirm that below.
However, U.S. job postings are still 33% higher than the pre-COVID Feb. 2020 moment. That implies job market conditions are still tight. That aggregate U.S. labor supply-demand tightness supports U.S. wages.
Image Source: Zacks Investment Research
What about the usual bellwether state of California? This time around, given the dominance of Tech in the California economy, it is not likely to serve as a barometer for the rest of the country, which is less dependent on Tech. However, while the rate of Indeed job posting decline is steeper in CA, its inclination is consistent with the broad U.S. Indeed data. I show you that, below.
Image Source: Zacks Investment Research
Consistent with the U.S. peak, the California Indeed job posting index did make a peak at 162 at the end of Dec. 2021 too. On April 7th, 2023, California’s Indeed index is 116. In sum, California Indeed job posting data is moving in sync with the U.S. data. Yet, the California data has declined to an even lower level. The state is still above the 100 Feb. 2020 pre-COVID level though.
With a move from 137 to 116 (21 ticks down) accomplished in a little over 4 months-time, let’s go with 5 ticks a month. California will be below its pre-COVID Indeed job posting level in July 2023.
Hmmmm. A July 2023 date is also when the Fed likely has just paused rate hiking.