Editor's Note: Below is an excerpt from an institutional research note written by Healthcare analysts Tom Tobin and Andrew Freedman on healthcare employment. Why is this important? As our analyst Tom Tobin wrote in an article that appeared on Investopedia earlier this year:
"The Affordable Care Act created legions of newly-minted medical consumers which benefited the bottom line of the companies that cared for them... [in other words] ACA has created a year-over-year comparison so enormous that healthcare stocks will probably unwind rather violently."
Our healthcare team calls the coming "unwind" the #ACATaper. Healthcare job openings are essentially a proxy for this massive pull forward of demand. That's why today's slowing JOLTS data (Job Openings and Labor Turnover Survey) was so critical.
Of the thousands of macro and fundamental data series we track on a daily basis, Healthcare Job Openings (JOLTS), proves to have the most consistent and reliable relationship to utilization trends in the industry.
Despite a slight sequential uptick in the absolute number of Healthcare Job Openings (1,015 April / 957 March), on a trending basis, growth was the slowest in 7 quarters with the 3-month YoY growth rate at +12.2%.
Why does that matter?
JOLTS as a percentage of Healthcare Employment remains extended at +2.1 standard deviations, suggesting there is a lot more downside to go as the #ACATaper takes hold and the U.S. Medical Economy mean reverts.
The latest JOLTS and Employment report is consistent with an organic growth slowdown at AHS and implies a sequential decline in adjusted same-store admissions volume at HCA, and is a sign of potential weakness for HOLX’s diagnostic business.
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