Help wanted: US job openings hit record high
Job openings hit a record high while one in three businesses struggle to find skilled talent.
The number of job openings in the United States hit a record high of 9.3 million in April, the US Bureau of Labor Statistics (BLS) said on Tuesday, as millions coming out of coronavirus hibernation unleash pent-up demand and businesses ramp up operations to meet it.
Job openings increased in several sectors in April, including accommodation and food services, which saw 349,000 additional posts added, according to the BLS’s latest Job Openings and Labor Turnover Survey (JOLTS).
The findings collide with the latest monthly jobs report released last week, which revealed an economy still trying to shake off the damage of coronavirus lockdowns and restrictions.
The nation’s unemployment rate was 5.8 percent in May and there were 9.3 million jobless workers. That compares to 3.5 percent unemployment in February 2020 – right before the coronavirus pandemic struck – when some 5.7 million workers were jobless.
“The labor market is on the right track, but there is still millions of workers yet to be absorbed in the economic recovery,” Economic Policy Institute’s senior economist Elise Gould wrote in a Tuesday blog post.
The disconnect between jobless Americans and record-high job openings has spawned debate among economists as to what is driving the disconnect.
Today’s JOLTS report also finds a series high quits rate of 2.7% while layoffs are now a series low of 1.0%. High quits mean workers feel comfortable leaving their jobs in search of better matches. Low layoffs are an obvious good. The economic recovery is gaining momentum.
— Elise Gould (@eliselgould) June 8, 2021
Some Republicans are blaming the $300 federal weekly top-up to state unemployment benefits for disincentivising the unemployed to find jobs.
Dozens of states led by Republican governors have announced plans to withdraw from federal unemployment benefit programmes, which include the weekly top-up.
But many economists believe there are other factors at play.
Some point to bottlenecks forming as millions of businesses reopen and expand operations at once. A lack of childcare options for working parents, older workers opting for early retirement and fear of contracting COVID-19 are also believed to be keeping the unemployed on the sidelines.
Job seekers in the driver’s seat
With so many jobs going begging, workers have more leverage over potential employers than they have had in recent years. Many of them are seeking greater flexibility and more competitive pay.
Average hourly earnings for employees on private payrolls increased by 15 cents in May to $30.33. That boost followed an increase of 21 cents in April.
And that strong bargaining position could get stronger in the coming months.
The latest quarterly employment outlook survey conducted by workforce solutions company ManpowerGroup found that more than 7,300 US employers reported their most optimistic hiring outlook since 2000. But one in three firms are struggling to find skilled talent.
“Childcare challenges, health concerns and competition mean demand still outstrips supply which is dampening the ‘big return’ of the American workforce,” said ManpowerGroup President for North America Becky Frankiewicz in a statement. “It’s a worker’s market and employees are acting like consumers in how they are consuming work – seeking flexibility, competitive pay and fast decisions.”
Employers who fail to adapt to newly empowered job hunters do so at their peril.
The number of Americans saying sayonara to their jobs voluntarily – what economists call the quits rate – hit a record four million in April, according to the latest JOLTS report.
Businesses are also more inclined to hang on to the workers they have. The number and rate of layoffs and discharges in April was little changed, at 1.4 million and 1.0 percent, respectively.
“High quits mean workers feel comfortable leaving their jobs in search of better matches,” said Gould. “Low layoffs are an obvious good. The economic recovery is gaining momentum.”