A Brutal Battle For Talent

The February JOLTS report this morning showed that too many employers are still competing for not enough workers. 

The most recent federal statistics show that the patterns of the past several months continue, indicating a new normal in a labor market marked by ongoing talent shortages.

Released monthly by the federal Bureau of Labor Statistics, the Job Openings and Labor Turnover Survey tracks hiring, resignations, and layoffs. Emsi Burning Glass senior economists Rucha Vankudre and Ron Hetrick were live with their initial takeaways and analysis from today’s report this morning; that live stream is available here.

The report showed there were 11.3 million jobs open in February, about even with January and just slightly down from the all-time high of 11.5 million openings in December 2021.

There are only 56 unemployed workers on the market for every 100 job openings, which is an all-time low. In other words, even if every unemployed person in America were hired tomorrow, that would still leave more than four in 10 job openings unfilled.

The number of quits ticked slightly upward this month, but so did the number of hires, which increased by 263,000 to 6.7 million. This indicates that those who left their jobs found new ones quickly—likely making a change for better pay or other advantages.

These kinds of separations show that the “Great Resignation”of the past year hasn’t made much impact on the number of people in the labor force—the same people are working, they’re just shuffling around between different jobs. That also means that employers have been unable to reach “unengaged” workers who have not been looking for jobs.

“As we keep saying every month, they’re not drawing people in from the sidelines,” Hetrick said in our broadcast. “We’re just turning the same people over.”

In an effort to recruit more workers, employers have been increasing wages (as shown in the monthly employment situation report), which is one factor contributing to increased inflation. However, many people have been making day-to-day purchases with savings, credit cards, or other means besides a paycheck. Inflation may drain those resources to the point where those individuals choose to rejoin the labor force—something to watch for in future months.

The so-called “Great Reshuffling” of those already in the workforce is shown in how job openings have changed within certain industries. Retail trade saw an increase of 105,000 job openings, construction had an increase of 75,000, and professional and business services added 50,000. The industries with the greatest decreases were accommodation and food services (-34,000), information (-29,000), and finance and insurance (-19,000).

Nothing in this report indicates the job market will be able to advance beyond this state of tension any time soon. Unemployment is currently at 3.8%, near its pre-pandemic level of 3.5% (which was itself the lowest rate since 1969). That means it’s difficult to foresee that rate going much lower, so it’s unlikely these millions of job openings get filled.

Because this JOLTS shows such consistency with the previous report, it’s very possible we can expect similar results for the next several months. But just because the numbers are stable, they aren’t necessarily good news for employers. They’re still in a “brutal battle” for workers, as Hetrick said during our live stream, and they will continue to need new and better data as they look for the talent they need.

On Friday, we’ll be live again with real-time insight into the monthly employment report, and you can join that discussion here.

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