Job openings in the United States surged to a record high of more than 10 million in June, while hiring lagged behind that figure by over 3 million, painting a picture of an economic recovery held back by a labor shortage as businesses struggle to find workers.
The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), released Aug. 9, showed that the number of job vacancies jumped by 590,000 to 10.1 million on the last day of June, led by gains in professional and business services, retail trade, and accommodation and food services.
“This is by far the record amount of job openings the economy has ever had. This historically elevated level makes clear that we have a severe worker shortage that threatens what should be a prolonged economic boom,” Curtis Dubay, senior economist at the U.S. Chamber of Commerce, said in a note.
At the same time, the JOLTS report showed that employers hired 6.7 million workers in June, with some economists saying the mismatch between vacancies and hiring is problematic.
“The biggest problem is getting workers to fill the historically large amount of open jobs,” Dubay wrote. “The enormous number of job openings is holding the economy back from reaching its potential.”
While the continued reopening of the economy has driven many businesses to seek workers, hiring efforts have been hampered by a labor shortage, with analysts generally pointing to factors such as child care issues, lingering worries about the pandemic, and generous unemployment benefits.
“This is the top issue in the economy right now,” Dubay said of the hiring woes, adding that Congress and the Biden administration “should be focusing on getting people off the sidelines and back to work.”
Responding to business hiring difficulties, Republican leaders in a number of states have moved to end early the federal pandemic unemployment compensation boost, blaming the measures for discouraging people from taking jobs.
Economists widely expect hiring to pick up as schools reopen in the fall and as the extended jobless benefits run out in the remaining states in September, although fears of a viral resurge are clouding prospects for economic recovery.
In other signs of labor market tightness, the JOLTS report showed that a record low 1.3 million people were laid off or fired in June, while the number of people quitting their jobs rose by 239,000 to 3.7 million in June, suggesting growing confidence among workers in being able to find a better job.
“The quit rate was 2.7 in June, which is also historically elevated,” Dubay wrote. “Workers know that jobs are plentiful and that they can secure another job easily if they leave theirs.”
On Aug. 6, the Labor Department reported that the economy generated 943,000 jobs last month and the unemployment rate in June fell to 5.4 percent.