Monster Employment Index Europe

I have been following the US Monster Employment Index for a few years now.  I have not paid much attention to the Monster Employment Index Europe.  There was something caught my attention in the latest (January 2012) report.

The summary of the 2012-01 Europe Index reported,

• The Monster Employment Index Europe grows 9% on a year-over-year basis.
• Germany is the only country to demonstrate strong annual growth at 30%.
• The Netherlands, Italy, Belgium and France continue to report negative growth rates.

I use the US Monster Employment Index as a simplistic current-to-leading index for the US economy. I would imagine there are many differences between US and European economies due to the regulations and political reality. The Europe Index reports only on seven countries: Belgium, France, Germany, Italy, Netherlands, Sweden, and United Kingdom. Though not covering all of the European Union countries, it is interesting enough for me to keep an eye on from time to time. I looked back to last year's numbers, this downward trend has started around August/September time. If the Europe Index bears a similar characteristics to its US counterpart, the western Europe except for Germany is close to another recession.

Some media thought that Germany's export has benefited from a weakened EURO. If not, there would have been fewer people that can afford their new BMW and Mercedes. I don't know whether that is true or not, but I wonder Germany can single-handedly pull the whole EU along with it. It is troublesome enough to worry about the bad sovereign debts. And now the economy of Europe is in a shaky state. Maybe that explains why all my mutual fund holdings that have European exposures are in retreat.

Monster US Employment Index April 2011

It just occurred to me that it is time to revisit Monster US Employment index to wrap up my experiment since early 2007.

According to US National Bureau of Economic Research (NBER), the last recession started from December 2007 and ended in June 2009. (http://www.nber.org/cycles.html) The recession lasted for 18 months and is having a slow recovery. The diagram based on Monster US Employment index seems to demonstrate something we all are aware now. But back in 2007 and early 2008, it hinted a recession that NBER did not announce until late 2008. This chart also echos another known fact, a slow recovery with job creation lagging the economy recovery.



I wanted to revisit Monster US Employment Index because of my last blog on LinkedIn. Usually, one single company's revenue is hardly any indication of US economy. However, LinkedIn's revenue source was so tightly related to employment and recruiting activities in US. It would be interesting to compare its revenue trend to US economy, like the way I used Monster's employment index. But no hurry. The indices from the first two years of Monster's publication were not that useful as Monster did not have enough market coverage and history. Give it another year, I'd like to compare LinkedIn's revenue growth alongside with Monster Employment Index. Maybe it will just give me a set of economic indices of my own.

US Monster Employment Index from 2007 to 2008

Now we have the complete US Monster Employment Index from January 2007 to December 2008.



When I started to monitor this index, I wanted to see whether it can serve as a leading economic index like other indices for wanted ads. From the chart, it looks like a concurrent index than a leading one. As those data are not seasonally adjusted, it is not yet the time to make the call.

The blip around April to June 2008 was explained by Monster that the time from April to June is usually a busy-hiring season. We will see this April whether the same seasonal phenomenon will repeat itself.

U.S. Monster Employment Index April 2008

The US Monster Employment Index increased to 174 in April. It was a sharp increase from March and formed a trough by tracing the index values. Is the economy in the recovery yet?

Not really. It is really a seasonal phenomenon. As the index is not seasonally adjusted, it is hard to tell whether this is in fact a decrease and by how much. Monster said, "The Monster Employment Index added seven points in April, as online job availability in the U.S. continued to rise moderately for the third consecutive month. Despite the gradual upward trend during the past three months, the Index remains down six percent year-over-year......" "While the Monster Employment Index registered its strongest single month gain in over 12 months, the increase was largely seasonal in nature."



So far it is an interesting experience to watch this index. It demonstrated the characteristic of a leading indicator as a young indicator. Secondly, it shows April is a good time for job hunting as employers are more active. What else can this index show us? We will find out as the US economy unfolds in the next twelve months.

U.S. Monster Employment Index of December 2007

The US Monster Employment Index for December 2007 was released on January 03, 2008. The number, 169, came in as a surprise to me.

In my previous blog, I predicted "another dip for December", since we have been observing consistent Novermber-to-December decreases since the inception of the index. I was thinking something around 175 given the weakness of November. Though only a difference of 3.4 percent, I would not dismiss it as white noise.

This morning, Mr. Bernanke said that Fed "must remain exceptionally alert and flexible" and "In light of recent changes in the outlook for and the risks to growth, additional policy easing may be necessary". All of this is expected except when the rate cut and how deep it will be.

I am still thinking the same way as I logged in last month's blog that Mr. Bernanke has all he can muster to land the economy softly. In the Valley, a down turn may give the Web bubble a chance for reality check. It can be the silver lining that goes a long way.

U.S. Monster Employment Index of November 2007

It seems the adjustment has started as I have suspected.

I logged down my thoughts on the index last month, "U.S. Monster Employment Index". This month we saw the index singing a similar tune.

November's number of US Monster Index dropped to 183 from 188 in October. The significance is not in the month-to-month change but the time it changes. The company said in the press release, "This marks the first time since its inception that the index has declined during the month of November ...", and "the year-over-year increase was the lowest on record".

I monitor the Monster Employment Index because of its resemblance of a leading index. Next month, we may see another dip for December, though it is nothing to be alarmed further. As I said, Monster Employment Index is too young to help us to predict the trend accurately. I believe Mr. Bernanke can manage to land the economy softly without a recession. Yet it is my observation on the strength of US economy. Even if we get a recession next year, I think it will be a short one, even shorter than the 2001 recession. But for now, let's hope it will not happen and the correction will come gently.

U.S. Monster Employment Index

I wrote a report on US Monster Employment Index for the business class I took at UC Berkeley Extension.

The U.S. Monster Employment Index is a monthly analysis of U.S. online job demand conducted by Monster Worldwide, Inc. (www.monsterworldwide.com), the parent company of Monster.com. Since my report was to explore less-used indices, I thought it would be interesting to see if the US Monster Employment Index exhibits the same characteristics as the US Help-Wanted Advertisement Index. As more and more employers move their hiring ads online, the Monster Index may tell us something different. You can see the part of my report on Monster Index at the end of the blog.

The report was written in March and more than a half year has passed. It is time to revisit my forecast and see how US economy is doing. Earlier this year, the ever rising price of oil was already a known problem. The potential ramification of US sub-prime mortgage was merely on the radar screen. Nevertheless, the US economy was strong. I predicted the Monster index for March to be 181, yet the actual number was 185, a more than 12% year-to-year increase. It was stronger than I have expected. The index topped in May to 189 and stagnated since then. As the Monster Index is not seasonally adjusted, the month-to-month change does not provide much insight into any short-term significance. The trend of year-over-year changes, however, has been on a consistent downhill slope, from 25% in January 2006 to 9% last month. Isn't a year-over-year increase good enough, even in single digit? Let's say, if the index stays at 190 until February 2008, the year-over-year change will still show a gain higher than 7%, while the index is not gaining anything. It is practically stagnant.

Is recession near? In February, former Federal Reserve Chairman Alan Greenspan warned that the US economy may fall into recession by the end of 2007. Mr. Greespan modified his tone a little bit in the past few months. Current Chairman Ben Bernanke expected a soft landing. If the Monster Index is telling us anything, it looks like Mr. Bernanke will not get an immediate recession, at least for the next few months. Whether Mr. Bernanke will get what he hoped for a soft landing, the Monster Index is still too young to tell.

Part of my report on US Monster Employment Index, written in March, 2007

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The U.S. Monster Employment Index depicted in the following diagram shows the monthly index values for the past year. The values are not seasonally adjusted due to the short history of Monster Employment Index.


Figure 1: U.S. Monster Employment Index Jan 06 to Feb 07

The U.S. Monster Employment Index increased nine points in February to 177, which is the highest level since its inception. It was contributed by a strong and broad increase in online recruitment for workers across the United States. During the month of February, 19 of 20 industries, and all nine U.S. Census Bureau regions reported increased online job availability. The Index’s year-over-year growth rate also edged higher to a total of 20 points or 12.7 percent. It was however a slower rate compared to February 2006 year-over-year growth, which scored 35 points or 28.7%.

It was a sign of relief to see such a sharp growth in February. This gain compensated the weaker-than-usual growth in January as December was usually the weakest month of online recruitment from Monster’s historical data. The monthly percentage change may give an impression that the online job demand is increasing by leaps and bounds. However it was more of regaining ground for which was lost in December 2006 when the index recorded the deepest December drop since 2003. The overall moderating trend was also observed in the 3-month moving average index values and year-over-year change curve. The 3-month moving average is stagnant since August 2006 and the year-over-year change slows down steadily.

Monster started to report U.S. online employment index as U.S. came out of last economic trough for about two years. The U.S. economy was moving from recovery into expansion mode at that time. For the past three years, U.S. Monster Employment Index has demonstrated a consistent growth pattern which coincided with U.S. economic expansion. The index has never seen a significant or prolonged decrease since its inception. Nevertheless, this growing trend started to show moderation in early 2006 and became stagnant late last year.

Our estimate for March 2007 is the index will report a mild increase that follows the trend throughout the past year. If we follow the moderating nature of the year-over-year change for the next release and use a number between 10% and 11% as an estimated rate, the index value for March 2007 will be around 181, a monthly change of roughly 2%. Since the U.S. Monster Employment index is not the most anticipated economic index among the market participants, there is no consensus estimate available for comparison.

Monster Employment Index is similar to the Help-Wanted Index, but instead of using newspaper ads, Monster index is collected based on online postings. It may have a similar, leading indicator characteristic as the Help-Wanted Index that it tends to peak before the economy peaks. As the market looks for signs for the direction of economy, a stagnant or even a decreasing employment index will weigh in on the opinion that the economy is close to the turn from peak to recession.