Unemployment Near a Record Low, Openings Near a Record High

The US added 431,000 jobs in March, marking a streak of 11 straight months with an increase of more than 400,000 jobs per month, and the unemployment rate edged down to 3.6%—barely above its pre-pandemic low.

The monthly Employment Situation report from the federal Bureau of Labor Statistics shows that the labor force participation rate (LFPR) was little changed at 62.4% in March, a full percentage point below its pre-pandemic level. 

The monthly JOLTS report released earlier this week showed that there are 11.3 million jobs open, with a ratio of only 56 unemployed workers on the market for every 100 job openings. Taking those statistics together, it’s hard to foresee all those openings filling up. 

“We have 5.9 million unemployed people; if we look at recent history, we bottomed out at 5.4 million,” said Emsi Burning Glass Senior Economist Ron Hetrick in our live broadcast this morning. “We are certainly running out of those active job seekers. If you want good news, I think the flip side of that is if you are a job seeker, or you’re out of the labor force and thinking you want to re-enter, you are facing an economy that desperately wants you to be there.”

The BLS also revised the January and February employment numbers up by a combined 95,000, marking a strong and consistent quarter for jobs growth.

The previous jobs report signaled a decline in the impact of Covid-19’s Omicron variant. This report shows that trend accelerating. Three key metrics of the pandemic’s impact all showed significant decline in March.

• The number of people teleworking because of the pandemic dropped from 13% in February to 10% in March.
• The number of people who lost work because their employer lost business fell from 4.2 million to 2.5 million.
• The percentage of unemployed people who were prevented from looking for work because of the pandemic fell below 1%, continuing its steady decline.

In February, labor force participation for women dropped by 0.2%, but it recovered back to 56.8% in March—welcome news, considering the ongoing worker shortage, but still below its February 2020 level. Unemployment fell for both men and women.

At the industry level, leisure and hospitality fields added the most jobs (a combined 112,000 between accommodations and food services and arts, entertainment, and recreation). However, job openings are still highest in those fields, and there are 1.5 million fewer jobs in leisure and hospitality compared to February 2020. On the other hand, professional and business services saw a gain of 102,000 jobs this month and now have 723,000 more jobs than they did before the pandemic.

The growth of white-collar jobs and continued shortages in service industry speak to a trend toward a “Great Reshuffle” that has taken place within the Great Resignation. New workers aren’t entering the labor force; individuals who quit are quickly taking new jobs, usually with better pay or other benefits like easier working conditions.

That still leaves a massive shortfall of workers, and businesses are still in a tight race for talent despite steady jobs growth. After consistent numbers over the past several months, it’s likely we continue to see employment rise, but not quickly enough to meet employers’ needs.

For more insight and analysis of today’s jobs report, catch up on our live breakdown right here.

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