Last week’s unemployment and payrolls report came in handily better than expectations. Employers added 1.37 million jobs in August, and the unemployment rate managed to come back down to 8.4%, with some exceptions over who was and was not counted in the workforce. The real question going forward is how America is going to get its total number of 13.6 unemployed people back to work.
Each week following the unemployment report, the U.S. Department of Labor releases its monthly Job Openings and Labor Turnover Summary. This so-called JOLTS report comes with a one-month lag, but it shows the hires, turnovers and job openings from the prior month. That, mixed in with the payrolls reports, gives a much better view about how solid the jobs market really is and how many unfilled jobs there are.
The JOLTS report covering the last day of July indicated that the total number of job openings rose by 617,000 to 6.618 million. This is actually a strong number, but questions remain about whether the jobs actually can be filled.
The number of hires fell to 5.8 million. Total separations, which include voluntary and involuntary separations, were deemed “little changed” at 5.0 million.
According to Bureau of Labor Statistics (BLS) data, job openings rose in multiple industries. The largest increase was 172,000 openings in the retail trade sector. Health care and social assistance came in behind that at 146,000 openings, and the construction sector had 90,000 job openings. As for where the jobs are seeing more openings, this was in the South and Midwest regions.
While the BLS did note that the COVID-19 pandemic had an impact on its ability to collect data, there is a clear picture of what the net subtraction has been in the jobs market since pre-pandemic reporting. Over the 12 months ending in July, the BLS reported a total hires of 70.2 million and 78.5 million separations. In short, the jobs market was had a net employment loss of 8.2 million jobs compared with the same time a year ago, even if the number included workers who may have been hired and separated more than once during the year.
There has been a longstanding debate about whether a job opening really means that a job can be filled. Some jobs that involve hard labor are hard to fill, even in the worst of economies. Some job openings may pay less than people are willing to make for the position. If a job is open across the country, a person might not be able to relocate to fill that job. And with some jobs, it is just hard to find any qualified candidates to fill the opening.
Our own view after last week’s better-than-expected unemployment report was that there are still cracks in the job market. That said, 6.618 million job openings at least leaves some added room after August’s 1.37 million net payrolls added for the total 13.6 million who were unemployed as of August.
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