Job openings in the United States rebounded to a near-record high in October while the total number of people leaving their jobs edged down, delivering a fresh sign of continued labor market tightness and suggesting that the recent moderation in employment growth was due to a shortage of workers rather than falling demand.
The Labor Department said in its monthly Job Openings and Labor Turnover Survey (JOLTS) on Dec. 8 that job openings, which are a measure of labor demand, rose 431,000 to 11 million on the last day of October, the second-highest number on record.
July saw U.S. job openings surge to an all-time high of 11.1 million, followed by a drop to 10.6 million for each of the following two months, driven in part by the Delta wave that cooled activity.
“The overall level of job openings remains very high, affirming that workers are very often in the would-be driver’s seat when it comes to finding or retaining jobs,” Bankrate Senior Economic Analyst Mark Hamrick told The Epoch Times in an emailed statement.
The so-called quits rate, which reflects worker confidence in being able to find a better job, edged down to 2.8 percent in October from a record high of 3.0 percent in the prior month. That corresponds to 4.2 million Americans quitting their jobs in October, down from an all-time high of 4.4 million in September.
“The number and level of those quitting their jobs has eased off the recent record high but remains elevated. This is in part because workers have some level of confidence that they’ll be able to find another income opportunity. I would expect the job market to firm further in early 2022,” Hamrick added.
Total separations, which include quits, layoffs, and discharges, edged down in October by 255,000 to 5.9 million, the JOLTS report shows. Rising job openings as separations decline suggests business hiring woes are unlikely to subside in the near future.
Struggling to attract and retain staff, businesses have boosted wages, with average hourly earnings up 5.1 percent over the year in October. Surging inflation, which hit a 31-year high of 6.2 percent in the 12 months through October, has erased those gains, however, with real earnings down 1.1 percent over the year.
Small business owners have been hit especially hard by the tightening labor market, according to the National Federation of Independent Business (NFIB), which said in a recent report that a record 29 percent of small business owners reported labor quality as their top business problem in November—a 48-year high.
“Unfortunately, the tight labor market has not eased for small business owners,” NFIB Chief Economist Bill Dunkelberg said in a statement. “Unfilled positions and labor quality remain the biggest challenges for small business owners as they work to get back to pre-crisis levels. Owners have been increasing compensation to record-high levels to attract the right employees to their business.”
The NFIB said that 93 percent of small business owners hiring or trying to hire in November reported few or no qualified applicants.
The Labor Department’s job opening and quits numbers follow a somewhat lackluster nonfarm payrolls report last week that showed U.S. employers adding a below-expectations 210,000 jobs in November, though the unemployment rate fell a relatively sharp 0.4 percentage points to 4.2 percent and the labor force participation rate edged up.
Market reactions were muted following Wednesday’s JOLTS report, with the benchmark S&P 500 trading in a sideways channel, down 0.10 percent as of 11:36 a.m. New York time.
The U.S. economy remains around 2.4 million jobs below pre-pandemic levels, with the jobs recovery a key touchstone for the Fed, which is mulling a faster timeline for tapering stimulus on the back of surging inflation and continued signs of strength in the labor market.
“Seeing substantial and more than ‘transitory’ inflation, high levels of job openings and the ongoing ‘Great Resignation,’ the Federal Reserve appears to be in the process of making a shift to a quicker end to monthly asset purchases,” Hamrick said, adding that he sees it as a likely prelude to a faster liftoff of interest rates.