September 9, 2020 Reading Time: 2 minutes

The latest Job Openings and Labor Turnover Survey from the Bureau of Labor Statistics shows the number of open positions in the private sector rose to 5.947 million in July (see top of first chart). Total job openings increased to 6.618 million. Private-sector openings have snapped back sharply since the low of 4.332 million in April at the height of government-imposed lockdowns. The private-sector job-openings rate, openings divided by the sum of jobs and openings, was 4.8 percent, up from 4.4 percent in June and a low of 3.8 percent in April (see top of first chart).

The industries with the largest number of openings were professional and business services (1.20 million), health care (1.15 million), retail (841,000), and leisure and hospitality (760,000). The highest openings rates were in professional and business services (5.7 percent), leisure and hospitality (5.7 percent), health care (5.5 percent), and retail (5.4 percent).

Conversely, private-sector layoffs fell in the latest month. Layoffs dropped to 1.65 million from 1.91 million in the prior month. The layoffs rate ticked down to 1.4 percent from 1.6 percent in June and is well below the 8.8 percent surge in March.

Quits by private-sector employees increased in July, rising to 2.80 million from 2.49 million in June (see bottom of first chart). The quits rate also rose, increasing to 2.4 percent from 2.1 percent in the prior month and well above the 1.6 percent from April (see bottom of first chart).

The rebound in job openings in the Bureau of Labor Statistics report is confirmed by the results of the survey of small businesses by the National Federation of Independent Businesses. Their most recent survey shows 33 percent of survey respondents have open positions they are unable to fill, up from 30 percent in July and a low of 23 percent in May (see top of second chart).

Despite the massive contraction in jobs that occurred in March and April, 46 percent of small business owners say there are few or no qualified jobs applicants (see bottom of second chart). The difficulty in finding qualified workers has pushed the lack of qualified labor to the top of the list of single most important problems for small business owners (see bottom of second chart). The list includes quality of labor (21 percent), taxes (17 percent), poor sales (15 percent) and government regulation (11 percent).

Overall, the data relating to the labor market paint a picture of recovery from massive damage. Initial claims for unemployment continue at a very high level as does the number of unemployed. Large amounts of workers are being called back, but the slowing pace suggests a complete recovery may take a substantial amount of time.

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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