How to Fill the 7.35 Million Job Openings in America
After last week’s unemployment and payrolls report for July, the U.S. Department of Labor has released its monthly Job Openings and Labor Turnover Survey. The report is for June, as it comes with a one-month lag, but economists, employers and investors look at the data for the underlying health of the jobs market with more detail than the monthly Employment Situation report.
The Labor Department reported that there were 7.35 million job openings in June. While this is still enough jobs for almost every single adult counted as unemployed or underemployed, this was a 0.6% decline from the June 2018 report and was said to be the first decrease on a year-over-year basis since 2017.
The overall tone of the report is that the total number of job openings is still holding close to all-time highs, but employer demand for new jobs (and replacement jobs) has weakened since 2018. A lower number of job openings also seems to coincide with a slowdown in hiring and the monthly payrolls gains.
Recent data also shows that employers in the nation have averaged about 165,000 new jobs per month during the period of January to July in 2019. While not unimpressive, this is lagging the 2018 average of about 223,000 jobs per month.
According to the report for June, the number of hires was little changed at 5.7 million and the hires rate was 3.8% in June. Hires increased in accommodation and food services by 76,000, but the total number of hires also was listed as “little changed” in all four regions.
Within separations, the quits rate is rather important. These are considered the voluntary separations that an employee initiates, and it measures workers’ willingness to leave one job for another job or opportunity. The total number of separations was 5.5 million in June, and the total separations rate was 3.6%. Of that group, the total number of quits was 3.4 million, and the quits rate was 2.3%. The Labor Department’s release said:
Quits decreased in transportation, warehousing, and utilities (-35,000) and state and local government, excluding education (-14,000), but increased in construction (+34,000). The number of quits was little changed in all four regions. The number of layoffs and discharges was little changed in June at 1.7 million. The layoffs and discharges rate was 1.1 percent.
The total number of job openings in the private sector in June was 6.629 million, down from 6.68 million in May and from 6.752 million back in June of 2018. If you include government job openings, the total number of economywide job openings was 7.348 million in June, compared with 7.384 million in May and 7.393 million in June of 2018.
Last Friday’s unemployment and payrolls report showed the following preliminary data on the unemployment statistics:
In July, the number of persons unemployed less than 5 weeks increased by 240,000 to 2.2 million and the number of long-term unemployed (jobless for 27 weeks or more) declined by 248,000 to 1.2 million. In July, the labor force participation rate was 63.0%, and the employment-population ratio was 60.7%. The number of persons employed part time for economic reasons fell by 363,000 in July to 4.0 million. Over the past 12 months, the number of involuntary part-time workers has declined by 604,000 and there were 1.5 million persons were marginally attached to the labor force.
It is impossible to get every job opening filled in a good economy or in a bad economy. There are geographic limitations due to family or homeownership. Some jobs are open because they pay too little or do not come with enough benefits to lure workers. Some employees who might be eligible or should take a different job may choose not to take the risk of a new job. Many factors play a role here.
The jobs market is still incredibly strong. That said, the strength has backed off a bit at the same time that the U.S. and China are in a trade war, the global economic growth picture is worse and U.S. gross domestic product strength is not what it was in prior quarters.