July job openings at 10.9 million
Total a record despite jump in unemployment, hiring dip
WASHINGTON — Across the United States, employers who are desperate to fill jobs have posted a recordhigh number of job openings. They’re raising pay, too, and dangling bonuses to people who accept job offers or recruit their friends.
And yet millions more Americans are unemployed compared with the number who were jobless just before the viral pandemic flattened the economy a year and a half ago.
The mismatch is a reflection of an unsettled economy — one that all but shut down at the height of the pandemic, then bounced back with unexpected speed and strength thanks to the rollout of vaccines and vast infusions of government spending. And now the economic outlook has been clouded yet again by a resurgence of covid-19 cases linked to the highly contagious delta variant.
On Wednesday, the Labor Department reported that employers posted 10.9 million job openings in July — the most on records dating to 2000.
But the department’s Job Openings and Labor Turnover Survey report showed that hiring dipped slightly to 6.7 million in July, from 6.8 million in June. Layoffs rose slightly to 1.3 million.
Nearly 4 million people quit their jobs, just shy of a record set in April, and up from 3.9 million in June. That suggests many Americans are confident enough in their prospects to seek something new.
“Overall, employers continue to struggle to find workers with the right skills, and those willing and able to work continue to be very selective,” Contingent Macro Advisors said in a research note.
For job-seekers, the abundance of vacancies is a welcome occurrence. Yet the magnitude of unfilled job openings poses a potential problem for the economy, especially if it persists over the long run: Companies that are short of employees can’t capitalize on a surge in consumer demand, thereby hampering economic growth.
The unprecedented demand for workers is happening even
while 8.4 million Americans are unemployed, up from 5.7 million in February 2020. And the economy is still 5.3 million jobs short of the number it had before the pandemic paralyzed the United States.
NO SENSE OF URGENCY
“Employers really want to staff up right now, especially those sectors that were hit hard by the pandemic,” said Nick Bunker, research chief at the Indeed Hiring Lab. “But a fair number of unemployed or job seekers don’t feel that same sense of urgency.”
Some would-be job seekers remain fearful of the coronavirus, especially given the spread of the delta variant. Some have struggled to find or afford child care at a time when the status of schools is in flux. Others are rethinking their lives and careers after being locked in at home and spending more time with their families.
Whatever the reason, many “don’t feel the need or desire to just jump into a job right now,” Bunker said.
After shedding millions of workers from payrolls last year, the rapid snapback in economic activity has left many businesses severely short-staffed. “Help Wanted” signs can be seen in the windows of businesses across the U.S., and many restaurants have limited their hours of operation.
The neediest employers are jacking up pay to try to attract workers. Over the past year, average hourly wages, even after being adjusted for inflation, have jumped 5.8% for restaurant and bar workers and 6.1% for hotel workers.
“It may also be time to pay more attention to the genuinely lousy nature of many of the jobs that are available,” Joshua Shapiro, chief U.S. economist at the Maria Fiorini Ramirez Inc. consultancy, wrote in a research note, adding: “Let’s face it, even $20 per hour with few if any benefits isn’t a princely sum.”
Shapiro suggested that some employers will need to consider offering more flexible work hours, better parental leave policies and enhanced health care benefits.
BENEFITS BLAMED
Many businesses have blamed generous federal unemployment benefits — including a $300-a-week supplement to state aid — for allowing the jobless to take their time returning to work. In response, about half the states withdrew from the federal program. But in a report last month, economists Peter McCrory and Daniel Silver of J.P. Morgan found “zero correlation,” at least so far, between job growth and state decisions to drop the federal unemployment aid.
In any case, the federal benefits ended nationwide on Monday, just as more and more schools are reopening. Bunker said he is hopeful that the job market will return to its pre-pandemic state sometime next year.
Then again, the delta variant, and the uptick in covid-19 cases it’s caused, risks slowing the recovery. On Friday, the Labor Department reported that employers added 235,000 jobs in August — only about a third of the number that economists had expected and down dramatically from around 1 million jobs that were added in June and July each. With the delta variant having discouraged some people from venturing out in August, restaurants and bars cut 42,000 jobs, the first such monthly drop this year. Hotels added just 7,000, the fewest since January.
Separate figures last week showed half of small-business owners said they had vacant positions they could not fill in August, a record in the National Federation of Independent Business survey. Meantime, the share of consumers who said jobs were “plentiful” in the Conference Board’s survey last month hovered near a twodecade high.
“Rising virus fear amid a renewed surge in covid infections will likely delay the return of some individuals to the workforce,” said Lydia Boussour, lead U.S. economist at Oxford Economics. “While we expect the labor market will continue to make some progress in coming months, it will likely take some time for these severe labor imbalances to get resolved.”