The Week in Review: April 10, 2023
Hiccups in the Job Market
Last week the U.S. Bureau of Labor Statistics reported that job openings fell 632,000 in February to 9.93 million. That’s on top of a downwardly revised 670,000 in January.
Openings remain historically high, though they have been moving lower. This is Fed-friendly because the Fed wants to slow inflation by bringing the demand for labor back in line with the supply of labor.
However, its tools are blunt and can’t be targeted toward specific industries.
While there are plenty of companies begging for workers, there is a mismatch in skills. Openings remain very high for restaurants and other lower-paying service jobs, while tech and other large firms are being much more selective.
Deciphering the data
The recent revisions in job openings also highlight the problems we sometimes see with the data. Distortions in spending created by the pandemic aren’t yet fully understood or incorporated into models.
Data models are seasonally adjusted so we can compare weekly, monthly, and quarterly reports as if they are apple-to-apple comparisons.
For example, spending typically jumps in November and December and falls sharply in January. That’s before the data models are adjusted for seasonal variations.
However, the pandemic forced a shift in patterns. Holiday spending has spilled into October. That means actual spending doesn’t go up as much in December as it did in the past. So, spending in December fell last year after seasonal adjustments.
Continuing, actual spending didn’t fall as much in January. Coupled with milder weather in much of the country, spending with seasonal adjustments surged in January per Census data.
What does it mean? As we entered 2023, the economy wasn’t as robust as some of the earlier reports suggested, and recent data are signaling a slowdown, including the labor market.
Please let me know if you have questions or would like to discuss any other matters.
Two for the Road
Data from Cigna reveals that the doctors they keep on staff to approve or deny claims are really, really fast at denying claims. One medical doctor declined 60,000 claims in a single month. Over the course of just two months, Cigna doctors declined 300,000 requests without even glancing at a file, spending an average of just 1.2 seconds per case. -ProPublica, March 25, 2023
A blended study of 105,000 headlines and 370 million impressions concluded that “each additional negative word” in a news headline increased the click-through rate by 2.3%. - Nature Human Behavior, March 16, 2023
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