June’s open jobs rise 8 per­cent to record 6.2 mil­lion

Northwest Arkansas Democrat-Gazette - - FRONT PAGE - In­for­ma­tion for this ar­ti­cle was contributed by Christopher Ru­gaber of The Associated Press; by Heather Long of The Washington Post; and by Shob­hana Chan­dra of Bloomberg News.

WASHINGTON — U.S. em­ploy­ers posted a record num­ber of open jobs in June, the La­bor Depart­ment said Tues­day, a sign that the solid hir­ing of re­cent months likely will con­tinue.

Job open­ings jumped 8 per­cent to 6.2 mil­lion, the high­est on records dat­ing back to 2000. Hir­ing fell, how­ever, and the num­ber of peo­ple quit­ting their jobs also dropped.

The data sug­gest that em­ploy­ers have plenty of jobs to fill but are strug­gling to find the qual­i­fied work­ers they need. Typ­i­cally, em­ploy­ers would of­fer higher pay to en­tice more ap­pli­cants, ac­cel­er­at­ing wage growth. But the gov­ern­ment’s jobs re­port for July, re­leased Fri­day, showed that pay gains haven’t picked up yet.

Job open­ings in con­struc­tion and man­u­fac­tur­ing rose sharply. They also in­creased in fi­nan­cial ser­vices, health care, and in state and lo­cal gov­ern­ment. The num­ber of open jobs in re­tail fell.

The re­port comes af­ter the gov­ern­ment said Fri­day that em­ploy­ers added 209,000 jobs in July and re­vised its June fig­ure higher to 231,000. Fri­day’s fig­ures rep­re­sent a net to­tal of jobs added mi­nus jobs lost, while Tues­day’s re­port in­cludes over­all hir­ing data.

Tues­day’s data come from the Job Open­ings and La­bor Turnover sur­vey. They are more de­tailed and pro­vide a

fuller view of the job mar­ket than the monthly jobs fig­ures.

The sur­vey sug­gests that the econ­omy is at or near “full em­ploy­ment,” when nearly ev­ery­one who wants a job has one and the un­em­ploy­ment rate mostly re­flects the tem­po­rary churn of job losses and gains.

If so, that has im­pli­ca­tions for the Fed­eral Re­serve: Busi­nesses would be forced to lift pay and po­ten­tially raise their prices to cover the cost of higher salaries if the econ­omy is at full em­ploy­ment.

That could spur in­fla­tion. Fed pol­i­cy­mak­ers have been rais­ing short-term in­ter­est rates partly be­cause they mostly think full- em­ploy­ment has been reached.

Yet on Fri­day, the gov­ern­ment’s jobs re­port showed that many Amer­i­cans have come off the side­lines and started job hunts in the past year, and most have found jobs. These newly em­ployed work­ers weren’t ac­tively look­ing for jobs in pre­vi­ous months and so weren’t counted as un­em­ployed.

That is a sign that more Amer­i­cans are will­ing to work than the un­em­ploy­ment rate sug­gests and in­di­cates the econ­omy isn’t at full em­ploy­ment yet.

Ac­cord­ing to Tues­day’s jobs re­port, in the 12 months through June, the econ­omy cre­ated a net 2.3 mil­lion jobs. That rep­re­sents 63.4 mil­lion hires and 61.1 mil­lion sep­a­ra­tions.

The view of many chief ex­ec­u­tive of­fi­cers is that there aren’t any good work­ers left. Over half of small-busi­ness own­ers in Amer­ica say there are “few or no qual­i­fied ap­pli­cants” for the jobs they have open right now, ac­cord­ing to the lat­est NFIB Small Busi­ness Sur­vey.

“The de­mand for qual­i­fied

warm bod­ies re­mains healthy, but the sup­ply of them re­mains stunted,” said Peter Boock­var, chief mar­ket an­a­lyst at The Lind­sey Group in Virginia. He points out that over 18 per­cent of Amer­i­cans be­tween the ages of 25 and 54 aren’t work­ing. That’s al­most 1 in 5 peo­ple in that “prime age” cat­e­gory. It wasn’t like that in the boom times of the 1990s and early 2000s. There would be about 2.5 mil­lion more prime age work­ers em­ployed to­day if the same per­cent­age of Amer­i­cans were work­ing now as in the 1990s.

But work­ers also have a mes­sage for CEOs: Pay more. Wages are barely grow­ing. Com­pa­nies have to pay up if they want bet­ter tal­ent. Dur­ing the re­ces­sion, there were al­most seven un­em­ployed peo­ple for ev­ery job open­ing. Busi­nesses could af­ford to be choosy — and of­fer low salaries. To­day, the sit­u­a­tion is dra­mat­i­cally dif­fer­ent. There’s only one job seeker for ev­ery open­ing. Ex­perts keep fore­cast­ing that wages will rise. This kind of “tight la­bor mar­ket” should

trig­ger fat­ter pay­checks for work­ers, but so far, that isn’t hap­pen­ing.

“When busi­nesses give this anec­do­tal ev­i­dence that they can’t find the work­ers they want, the first thing I would ask them is: Have you in­creased your pay?” said econ­o­mist Elise Gould of the Eco­nomic Pol­icy In­sti­tute, a lib­eral think tank.

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