Job openings spiked to record 11.7 million, while 12.1 million people still claimed unemployment benefits.
Unfilled job openings have been spiking from record to record, and in July spiked to a new record. And the number of people who quit a job remained in record territory, as companies tried to fill jobs by offering higher wages and signing bonuses and ended up hiring already employed workers away from other companies.
Total unfilled job openings, not seasonally adjusted, spiked by 1.24 million to 11.7 million openings in July, up by 52% from July 2019, according to the JOLTS report by the Bureau of Labor Statistics today.
Seasonally adjusted, job openings spiked by 749,000 in July to a record 10.9 million openings:
These 11.7 million job openings are occurring amid sharply higher wages, even as 8.4 million people are deemed to be “unemployed,” according to the monthly jobs report released on Friday, and even as 12.2 million people claimed some form of unemployment compensation.
This is the conundrum of the most distorted labor market ever that is often summarized by the expression of “labor shortage,” as employers see strong demand for their products and services but have trouble hiring, though there is no shortage of people who could work.
But people, for whatever reason, cannot find work they would accept under the conditions offered, or they are still not looking for work, or will never look for work again since they have decided to retire.
Employers reported that their payrolls, at 146.8 million workers, were still down by 5.3 million from February 2020 (green line in the chart below), and households reported that the number of people working, including the self-employed, at 153.2 million, was still down by 5.6 million from February 2020 (red line), according to the BLS jobs report on Friday:
The aggressive efforts to fill open positions with qualified staff by offering higher wages and signing bonuses and better benefits have the effect that employers are hiring people who already have a job. To get those higher wages and the hiring bonus, they quit their old job.
For employees, this is a moment of finally feeling the pricing power of labor. For employers whose employees were poached, this creates new job openings and new headaches.
So the “quits” hit a record in April of nearly 4 million, and in July were back at the record of nearly 4 million people who quit their jobs. This shows how difficult the labor market is for employers in hiring and retaining staff.
A large growing number of quits is the signature of a strong competitive labor market that gives workers leeway to switch jobs and sends employers scrambling to hire and retain staff:
To see the Unfiled Job Openings Listed by sector visit WolfStreet for the full article