May 3, 2022

The  Labor Department reported that job openings rose 205 thousand in March to a record high level of 11,549 thousand after having risen 61 thousand in February.  With as many job openings as there are, it is surprising that more workers are not being hired.  It could be that the available workers do not have the skills required for the jobs that are available.  Some others may have chosen to become gig workers or go into business for themselves.  Or, perhaps, between their unemployment benefits, generous child welfare payments and rent relief, that some of those unemployed workers are choosing not to work.  Having said that, as more and businesses continue to reopen and expand and the corona virus abates,  the economic expansion will gather momentum, the number of job openings will continue to climb, and the unemployment rate will decline steadily.

As shown in the chart below, there are currently more job openings than there are unemployed workers.  Specifically, there are 0.5 unemployed workers for every available job.  Prior to the recession this rate was steady at about  0.8.  Thus, by this measure the labor market is now back to its pre-recession degree of tightness.

The Labor Department also provides information on hires each month.  Hires declined b 95 thousand in March to 6,737 thousand after having jumped 406 thousand in February.  The pace of hiring is going to quicken in the months ahead as the economy continues to expand at a relatively brisk pace.

Thus, the rate of hiring was unchanged in March at 4.5.  The rate of job openings rose 0.1 to 7.1.  Thus, job openings were 57.8% higher than hires which suggests that employment should continue to climb rapidly in the months ahead.  Prior to the recession job openings were  15% higher than hires which was a reflection of the very tight labor market that existed at that time.  Unemployed workers today do not seem to have the skills required by employers, have chosen to become gig workers and go into business for themselves, are afraid to work for fear of catching COVID and bringing it home to their families, are unable to find affordable day care, and/or are willing to live off generous government benefits for as long as they can.

Workers are unafraid to quit their job.  They know they can easily find another one.  The quit rate rose 0.1 in March to 3.0 after having risen 0.1 in February.  This ties the record high level for this series.  This willingness to quit one’s job is another clear indication that the labor market is very tight and workers remain in the driver’s seat.

Stephen Slifer

NumberNomics

Charleston, SC