August 29, 2023
The Labor Department reported that job openings fell 338 thousand in July to 8,827 thousand after having fallen a sharp 451 thousand in June. The pace of economic activity has been slowing a bit, but the labor market keeps hanging in there. Job openings have fallen from their peak of 12,027 thousand in March of last year, but remain far higher than the 7,000 thousand level that existed prior to the recession. At its current pace of descent it will take until the early part of next year to return to its pre-pandemic level.
As shown in the chart below, there are currently more job openings than there are unemployed workers. Specifically, there are 1.5 jobs available for every unemployed worker. Prior to the recession this rate was steady at about 1.2. Thus, the demand for labor still exceeds the supply.
The Labor Department also provides information on hires each month. Hires fell 167 thousand in July to 5,773 thousand after declining 291 thousand in June. Despite the prospect of slower growth ahead, the pace of hiring has not slowed much..
The rate of job openings fell 0.2 in July to 5.3 while the pace of hiring fell 0.1 point to 3.7. Thus, job openings were 43.2% higher than hires which suggests that employment should continue to climb in the months ahead. Prior to the recession job openings were 15% higher than hires. 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 unable to find affordable day care, and/or are willing to live off generous government benefits for as long as they can. Thus, job openings continue to outpace hiring.
The quit rate fell 0.1 in July to 2.3 after falling 0.2 in the previous month. The willingness to quit one’s job has declined in recent months as workers concern about a recession occurring in the not-too-far-distant future makes them slightly less willing to quit the job that they have been. Prior to the recession the quit rate was 2.3. It is exactly where it was prior to the recession.