October 12, 2021 Reading Time: 3 minutes

The latest Job Openings and Labor Turnover Survey from the Bureau of Labor Statistics shows the total number of job openings in the economy fell to 10.439 million in August, down from 11.098 million in July (a record high). The number of open positions in the private sector decreased to 9.603 million in August, down from 10.044 million in July (also a record high; see first chart). Despite the decline, total and private sector openings remain extremely high by historical comparison.

The total job openings rate, openings divided by the sum of jobs plus openings, fell to 6.6 percent in August from 7.0 percent in July while the private-sector job-openings rate dropped to 7.1 percent from 7.4 percent (see first chart).

Four industry categories have more than 1.6 million openings each: trade, transportation, and utilities (1.995 million), professional and business services (1.810 million), education and health care (1.719 million), and leisure and hospitality (1.709 million; see second chart).

The highest openings rates were in leisure and hospitality (10.1 percent), professional and business services (7.9 percent), education and health care (6.8 percent), trade, transportation, and utilities (6.8 percent), and manufacturing (6.5 percent; see third chart).

The number of private-sector separations rose to 5.712 million in August, up from July’s 5.535 million. Within separations, private quits were 4.096 million (versus 3.872 million in July; see fourth chart) and private layoffs were 1.290 million, down from 1.368 million in the prior month.

Trade, transportation, and utilities led with 1.024 million quits in August followed by leisure and hospitality with 971,000 and professional and business services with 706,000 (see fifth chart).

The quits rates among the private-sector industry groups was led by leisure and hospitality with a rate of 6.4 percent, well ahead of the number two, trade transportation, and utilities, with a 3.7 percent quits rate and number three, professional and business services, with a 3.4 percent rate (see sixth chart).

From the worker perspective, labor market conditions remained very favorable in August. The number of openings per job seeker (unemployed plus those not in the labor force but who want a job) ticked down slightly to 0.759 in August from a record high 0.782 in July (see seventh chart).

Overall, today’s job openings data continue to suggest a very tight labor market. However, the weaker-than-expected September jobs report (the second disappointment in a row) showed a net increase of just 194,000 payroll jobs, though the weakness was largely concentrated in public-sector education where a shift in hiring patterns may have disrupted seasonal adjustment. Private payrolls posted a 317,000 gain in September after a 332,000 gain in August. The pace of gain was less robust than expected, but the gains were widespread. Slower hiring may be a function of the recent resurgence in new Covid cases, or it may reflect the difficulty employers are having finding workers, or both.

Ongoing fallout from the pandemic and government lockdowns continues to ripple through the global economy, resulting in product and materials shortages, manufacturing delays, and shipping and logistical problems.  All these are pushing up prices across the economy. Subsequently, rising prices have led to falling consumer confidence, boosting the risks for the economic outlook. A consumer retrenchment would further hinder the recovery, though the damage will be far less than the carnage caused by widespread lockdowns. Overall, the outlook is for continued recovery but the threats and headwinds to growth remain significant.

Robert Hughes

Bob 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.

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