Labor worries continue for employers, despite hiring improvements
Job openings are still nearly double the number of available workers.
According to the May Job Openings and Labor Turnover (JOLTS) report released July 6, there were 11.3 million job openings to close out May. Hiring in May was virtually unchanged from the previous month at 6.5 million and the quit rate also remained unchanged at 3.9%.
Voluntary resignations remained high, according to a Reuters report. About 4.3 million people quit their jobs, little changed from April. Quits have remained above 4 million for 12 straight months, which could keep wage pressure elevated.
All told, there were 5.95 million people counted as unemployed in May, meaning there were 1.9 openings per every available worker, still around historical highs.
The figures reflect the unusual nature of the post-pandemic economy, notes the Associated Press. “Inflation is hammering household budgets, forcing consumers to pull back on spending, and growth is weakening, heightening fears the economy could fall into recession. Yet companies are still scrambling to add workers. Demand has been particularly strong in travel- and entertainment-related services.”
However, it’s not all bad news. The Bureau of Labor Statistics (BLS) reports that U.S. employers expanded payrolls by 372,000 jobs last month. June’s job gains exceeded many economists’ projections of about 272,000 jobs.
But the June jobs report also shows that employers added 74,000 fewer jobs than previously reported in April and May combined. Since the start of 2022, overall employment in the United States has increased by about 2.3 million jobs — or about 388,000 positions per month, on average.
With inflation rising at a 40-year record pace — the consumer price index rose 9.1% in June — the Federal Reserve raising interest rates to tame it, and predictions of a recession becoming more widespread, it’s becoming more obvious that the earthquake known as the COVID-19 pandemic is now producing aftershocks. Here are some other highlights of the recent BLS jobs report, which paint a mixed picture of the labor market.
Employers in education and health services led job growth in June
The education and health services sector added 96,000 jobs last month, according to the BLS. Other top contributors to job growth in June were the professional and business services industry, which added 74,000 jobs, and the leisure and hospitality industry, which saw job gains of 67,000.
The latest jobs report shows that employers in these industries also expanded their payrolls in June:
- Transportation and warehousing: 35,500 jobs added;
- Manufacturing: 29,000 jobs added;
- Information: 25,000 jobs added;
- Wholesale trade: 16,400 jobs added;
- Retail trade: 15,400 jobs added; and
- Construction: 13,000 jobs added.
National unemployment rate remains at a 54-year low
The unemployment rate in June was 3.6%. This rate, which is a 54-year low, has been unchanged since March 2022.
The unemployment rate for college-degreed workers who are 25 or older — those who are in highest demand by employers — ticked up slightly in June to 2.1%, after sitting at 2.0% for three consecutive months.
Percentage of employed persons working remotely due to the pandemic edges down
The June jobs report notes that 7.1% of employed persons teleworked last month due to the COVID-19 pandemic, down from 7.4% in May. The BLS describes these workers as employed persons who worked away from the office for pay at some point in the last four weeks specifically because of the pandemic.
Number of people unable to work because of the pandemic rises
Household survey supplemental data from the BLS also finds that the number of people unable to work at all, or who worked fewer hours at some point in the four weeks preceding the latest survey due to the pandemic, was 2.1 million. That figure was 1.8 million in April.
Click here to sign up for the free IB Ezine — your twice-weekly resource for local business news, analysis, voices, and the names you need to know. If you are not already a subscriber to In Business magazine, be sure to sign up for our monthly print edition here.