The latest job openings and labor turnover survey (JOLTS) from the Bureau of Labor Statistics showed that there were 7.051 million job openings in America in August. That was below estimates and the July figure was revised lower, but total vacancies were still not far from the record high and continued to easily exceed total hires. In fact, the hires-per-job-opening ratio in August held below 1.0 for the vast majority of U.S. industries, implying that most firms are having a difficult time filling vacancies. Similarly, there were a million more job openings in August than out-of-work Americans, the 18th straight month that vacancies have outnumbered job seekers in this country. The ratio of quits to layoffs and discharges, an indicator of workers’ willingness to give up their current job security for better employment opportunities, also remained elevated.
Evidence of tight labor conditions was also found in a report released by the NFIB earlier this week. Specifically, “finding quality labor” was once again the top-cited problem facing small business owners in the monthly survey, and talent shortages were especially severe in the construction, manufacturing, and non-professional services industries. Further, of the 57 percent of owners who said that they were trying to expand their staff in September, nearly nine in ten reported not being able to find the workers they were looking for, suggesting that a skilled labor shortage remains a big driver of this year’s slowdown in hiring. Although supportive of wage growth and improved benefits offerings, this tight labor market can also lead to greater consumer inflation as businesses try to pass on the rising cost of labor. Fortunately, higher productivity growth has helped keep such inflation pressures in check recently.
Sources: Econoday, U.S. DoL, NFIB, WF, FRBSL