Job Openings Top 6 Million for the First Time
The Bureau of Labor Statistics reported that the number of open jobs in the United States topped 6 million for the first time. The total number of open jobs hit 6.044 million in April, pushing the openings rate (the number of open jobs divided by employment plus open jobs) to 4.0 percent, matching its highest rate.
Among private sector industries, a record 5.464 million openings were reported in April, resulting in an openings rate of 4.2 percent. That 4.2 percent rate was just shy of the record 4.3 percent rate in July 2015. Two industries had more than 1 million openings — professional and business services (1.134 million) and health care (1.013 million) — resulting in openings rates of 5.2 percent and 5.0 percent, respectively. Accommodation and food services reported 775,000 openings (a 5.4 percent openings rate), while retail industries had 577,000 openings (a 3.5 percent openings rate) despite a number of high-profile retail-store closings. Other industries where the openings rate is above the national average include other services (5.8 percent) and finance and insurance (4.3 percent).
Regionally, the South had the most openings at 2.16 million, followed by the Midwest (1.487 million), the West (1.246 million), and the Northeast (1.15 million). The highest openings rate was in the Midwest (4.4 percent), followed by the Northeast (4.1 percent), the South (3.9 percent), and the West (3.6 percent).
Despite the record number of openings and the high openings rates, total quits and quit rates remained only slightly below prior peaks. In total, 3.027 million workers quit in April, resulting in a quit rate of 2.1 percent, below the 2.2 percent rate in March and below the 2.3 percent peak in September 2005 during the last economic cycle. For the private sector, 2.872 million workers quit in April, resulting in a rate of 2.3 percent. That is down from a rate of 2.4 percent last month and well below the 2.6 percent peak in September 2005. Among the industries, the highest quit rates were in accommodation and food services (4.2 percent); arts, entertainment, and recreation (3.6 percent); business and professional services, including temporary employment agencies (3.1 percent); retail (2.7 percent); and construction (2.4 percent).
The message from the Job Openings and Labor Turnover Survey is the labor market remains healthy. Openings remain plentiful, suggesting demand for workers is strong therefore in order to fill the open jobs, employers are likely to feel pressure to bid up wages to attract workers, either from other employers or from outside the labor pool. In addition, companies may seek to substitute more capital for labor, implying some potential for faster investment spending, which should help boost productivity.
Robert Hughes
Robert Hughes joined AIER in 2013 following more than 25 years in economic and financial markets research on Wall Street. Bob was formerly the head of Global Equity Strategy for Brown Brothers Harriman, where he developed equity investment strategy combining top-down macro analysis with bottom-up fundamentals. Prior to BBH, Bob was a Senior Equity Strategist for State Street Global Markets, Senior Economic Strategist with Prudential Equity Group and Senior Economist and Financial Markets Analyst for Citicorp Investment Services. Bob has a MA in economics from Fordham University and a BS in business from Lehigh University.
