By Eric Morath for the Wall Street Journal: Job openings reached a record 8.1 million at the end of March, reflecting a widening gap between open positions and workers willing and able to take those roles.
Available jobs rose by a seasonally adjusted 600,000 in March to exceed the prior record of 7.6 million set in November 2018, the Labor Department said Tuesday. Data from job search site Indeed. com separately showed job posting continued to rise in April, ending the month 24% higher than February 2020’s pre-pandemic level.
The Labor Department said the highest rate of open jobs was in the South, while the strongest growth in openings was in the Northeast. Government and private data showed increasing openings in construction, manufacturing and hospitality.
The growth in available jobs came as hiring cooled to a seasonally adjusted 266,000 in April from a gain of 770,000 the prior month, the Labor Department said last week.
“Employers are looking to hire, but temporary factors are making people a little hesitant to take jobs,” said Nick Bunker, an economist at Indeed. The number of available jobs “shows how difficult it is to turn openings into hires.”
The rate of openings, or available jobs as a share of all filled and unfilled positions, was also a record at 5.3% in March. That is above the pre-pandemic peak of 4.8% in late 2018, when the unemployment rate approached a 50-year low.
The South maintained the highest openings rate, at 5.5% in March. That region broadly has had fewer restrictions and reopened from pandemic-related restrictions ahead of other parts of the country. The openings rate in the Northeast rose to 5.4% in March from 4.7% the prior month. The West had the lowest openings rate, 5.1%, but that was well up from February.
There were still more unemployed Americans—9.7 million in March—than open jobs, but there are factors economists see for why workers aren’t taking available positions. Those include expanded unemployment benefits, fear of contracting Covid-19 and a lack of child care.
Some unemployed workers may not have the skills or desire to take available jobs in fields such as manufacturing, which added 134,000 available jobs in March, or construction, which added 72,000.
Openings in accommodation and food service rose by 185,000 in March to nearly one million. However, average hourly wages in that sector, $16.63 an hour in March, was in line with what many people receiving unemployment benefits receive, and workers often start at lower wages.
A lack of available workers for restaurants could also reflect that prospective employees found better-paying jobs at warehouses and other employers, Mr. Bunker said. Average wages in the warehouse industry were more than $22 an hour in March, and there were about 350,000 jobs available in the broader transportation, warehousing and utilities sector.
Mr. Bunker said that pandemic- related unemployment benefits and partially remote schools—two factors restraining labor supply—should be temporary. A $300 enhancement to weekly jobless benefits and a nearly 18-month extension of payments for some workers expire in early September. Most students are also expected to attend school in person in the fall, easing child-care issues.
President Biden on Monday said he didn’t see evidence that jobless benefits were keeping Americans from applying for jobs. The National Federation of Independent Business said Tuesday that 44% of small-business owners reported job openings they couldn’t fill in April, the highest level in records dating back to the 1970s. “Finding qualified employees remains the biggest challenge for small businesses and is slowing economic growth,” NFIB chief economist Bill Dunkelberg said. “Owners are raising compensation, offering bonuses and benefits to attract the right employees.”
The number of job openings appears at odds with April’s lackluster hiring figures. Earnings and hours worked also rose in April, and the rate at which workers quit their jobs—a proxy for confidence in the labor market—increased to 2.4% in March, matching a record high. Those are all signs of a tightening labor market.
Some economists think the Labor Department may be struggling to collect the data and adjust it for seasonal effects during a time of rapid change.
“Our sense is there was something going on with the seasonal adjustment process,” RBC Capital Markets chief U.S. economist Tom Porcelli wrote in a note to clients on Monday.
The U.S. lost more than 20 million jobs a year ago in April at the start of the pandemic.
The Labor Department’s statistical arm has tweaked how it seasonally adjusted payroll data during the pandemic and said more of its data is collected through the internet rather than personal outreach. However, seasonal adjustments used for the April figures were in line with adjustments made historically, Bureau of Labor Statistics economist Angie Clinton said.
AND:
Employers, Prepare for a Wage Jolt
Over the years, the refrain of businesses complaining about how hard it is to find workers has become a bit like the boy who cried wolf. But now the wolf actually may have arrived.
He is asking for a fatter paycheck.
The Labor Department on Tuesday reported that the number of unfilled job openings in the U.S. rose to a record 8.1 million on the last day of March, lifting the job-openings rate—job openings as a percentage of the total number of open and filled jobs—to 5.3% from 5% a month earlier. Before the pandemic, the highest the job-openings rate had ever hit in the 20-year history of the data was 4.8% in 2018.
If anything, the job-openings rate is higher now. Data from jobs site Indeed.com show that as of May 7 job postings were a seasonally adjusted 23% above their Feb. 1, 2020, level. That is up from the end of March, when postings were 16% above that pre-pandemic level.
Stories about businesses struggling to find workers were a constant feature of the years leading up to the pandemic, but since wage gains were middling throughout that period, they began drawing scoffs. If you really need people so badly, why not pay them more?
The extreme level of job openings now, plus a mountain of anecdotal evidence, shows businesses really are facing severe labor needs, while last Friday’s disappointing April jobs report suggests that even with millions of people out of work, filling positions won’t be easy. There are disagreements about why hiring is so hard now: Some people point to the continuing lack of child-care options, for example, while others lay the blame on enhanced unemployment benefits lowering the incentive to work. The reality is probably that, in the wake of an unprecedented crisis, there are many things happening at once. Some people may view high-contact
Unfilled job openings rose to a record 8.1 million on the last day of March. MIKE SIMONS/TULSA WORLD/ASSOCIATED PRESS
jobs as riskier than before, for example, while others may be more focused on the opportunity, post-vaccination, to see family after a year’s absence. There could be mismatches between where job openings are located and the places unemployed people are. With demand for workers looking likely to intensify, many realize that they can be picky.
Whatever the reason, if the disincentives to work are higher now, then the way to overcome them is by raising the incentives. The biggest one is pay. Doing so might not be the easiest thing for employers to stomach. Companies face investor pressure to maintain profit margins, while many smaller businesses have experienced financial strains as a result of the pandemic that give them less room to maneuver.
Nevertheless, to keep pace with demand in a quickly growing economy, businesses are going to need to add workers. If higher wages are the only way they can do it, wages are going higher.
—Justin Lahart