Labor-Market Outlook Remains Strong as Job Openings Surge
The latest Job Openings and Labor Turnover Survey from the Bureau of Labor Statistics shows a surge in job openings in August, suggesting continued strength in the labor market and the economy. Total job openings in the United States rose to 7.136 million in August from 7.077 million in July. Private sector job openings totaled 6.464 million in the latest month, up from 6.384 million previously (see chart). Both are at new all-time highs.
The industries with the largest number of openings were professional and business services (1.318 million), health care (1.143 million), accommodation and food services (898,000), and retail (768,000). The government sector had 673,000 open positions as of August.
The job-openings rate, openings divided by the sum of jobs and openings, rose to 4.6 percent from 4.5 percent for the total labor market and held at a record 4.8 percent for the private sector (see chart). The highest openings rates were in accommodation and food service (6.0 percent), professional and business services (5.9 percent), and health care (5.4 percent).
Further signs of labor-market strength may be seen in the layoffs rate, which came in at 1.3 percent for private employers, well below the 2.2 percent peak rate in 2009, and the quits rate, which held a cycle-high 2.7 percent (see chart). The low layoffs rate is confirmed by the multi-decade low level of initial claims for unemployment insurance, while the high quits rate corroborates the high level of confidence in the jobs market seen in The Conference Board Survey of Consumers.
Combining the data on people who are looking for work or want a job but haven’t looked in the past month with the jobs-openings data, the number of available people per opening ticked up slightly to 1.594 in August, just slightly above the record-low of 1.538 in July and just a fraction of the 9.923 people per opening available in 2009, just after the end of the Great Recession.
Overall, the data relating to the labor market continue to show strength. Payrolls are rising, layoffs remain low, and quits have risen. The substantial number of open positions in the economy and the low number of available workers per opening suggest wage gains may continue to accelerate, but, as of now, increases have remained quite moderate. Still, attracting and retaining qualified labor is likely to remain a critical issue for business in the immediate future.
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.
