The numbers: Job openings in the U.S. rose slightly in May to a record 9.21 million, reflecting an insatiable demand for labor as the economy fully reopens and businesses scramble to keep up with soaring sales for their goods and services.
The number of available jobs has set a record for three straight months. Job openings had fallen to as low as 4.6 million last year after the coronavirus pandemic briefly shut down much of the economy.
Businesses are trying to fill the mountain of available jobs, but it’s not going as fast as they would like. Although the U.S. created 850,000 new jobs in June, it would take more than a year at that rate to restore employment to pre-pandemic trends.
The competition for workers has given jobseekers the upper hand. A record 4 million people quit two months ago — most to take a better or better-paying job. That’s nearly double the number of people quitting a year earlier.
“People are moving from one job to the next,” said Anthony Nieves, chairman of a monthly survey of service-oriented companies that asks how business is going. The survey is compiled by the Institute for Supply Management.
Big picture: The U.S. economy is as hot as a summer day in July, but a surprising labor shortage of sorts threatens to rain on the recovery.
Companies can’t hire enough new workers to keep up with customer demand and veteran employees are often being poached by rivals offering higher pay. Some firms have even had to reject new business.
Economists predict millions of people who left the labor force during the pandemic will eventually return to work as schools and daycare centers reopen, Covid peters out, and extra government unemployment benefits expire in September.
Key details: Job openings increased in May mainly in government and education, the Bureau of Labor Statistics said Wednesday.
The number of jobs available was also high in almost every industry and in most parts of the country.
One big caveat: While there’s almost as many job openings now as there are unemployed people, the jobs aren’t always where unemployment is highest.
The number of people who left jobs, meanwhile, fell to 5.32 million in May from 5.8 million in April. These include workers who quit, retired, got laid off or were fired.
The decline largely stemmed from fewer people quitting. Some 3.6 million quit in May, down from a record 4 million in April.
As a result, the so-called quits rate among private-sector workers also declined to 2.9% from a record 3.2%. More people quit when the economy is doing well or they think they can find a better job.
At the height of the coronavirus crisis, the quits rate had fallen to a seven-year low of 1.8%.
The government’s job-openings report is released with a one-month lag.
What they are saying? “Companies are turning away business because of the labor shortage and that’s a shocking move,” said senior economist Jennifer Lee of BMO Capital Markets.