Monday, June 6, 2022

More indications of employers continuing to need workers in early 2022

In the first third of 2022, the US labor market continued to be historically strong. More proof of that came with last week's Job Openings and Labor Turnover Survey (JOLTS), which showed that employers continued to have millions more job openings than available workers.
The openings total declined by 455,000 from the upwardly revised March number to 11.4 million in April, about in line with the FactSet estimate, according to the bureau’s Job Openings and Labor Turnover Survey.

That left a gap of 5.46 million between openings and the available workers, still high by historical standards and reflective of a very tight labor market, but below the nearly 5.6 million difference from March. As a share of the labor force, the job openings rate fell 0.3 percentage point to 7%.
What also continued in April was the Great Resignation, with workers still leaving their jobs at record levels.
In April, the number of quits was little changed at 4.4 million. The rate was unchanged at 2.9 percent. Quits increased in real estate and rental and leasing (+37,000) but decreased in state and local government education (-19,000).
I would assume the quits in state + local public schools will tick up quite a bit in the coming months, perhaps exceeding the usual amount of teachers saying they've had enough.

It's been a remarkable jump in the private sector in the amount of hiring and quits since most Americans were able to get COVID vaccinations starting in March 2021.

And despite the small decline in total openings in the last 2 months, two main blue-collar industries saw a big jump in employers wanting to fill positions. Openings in manufacuturing has especially shot up, even as hiring remains strong in the sector, and layoffs are lower than they were in early 2021.

Construction also saw a large number of seasonally-adjusted openings, meaning that there were more needs beyond the typical warm-weather season.

You see those charts, and it makes a lot of sense that construction saw job gains of 36,000 in May, and manufacturing had a combined gain of 79,000 for April and May. And with demand that high, it seems like a pretty good time to be a worker in those industries (oh, but Biden and Dems have abandoned blue-collar America. Riiiight)

April also did have one harbinger of possible concern, and that was in the decline in needs and quits in a couple of sizable service sectors.

Retail ended up having a sizable seasonally-adjusted decline of 60,700. It's a bit misleading, as May is usually a month with a large amount of hiring, but it's still a red flag, especially as rents come due and people have now adjusted their spending habits to an post-COVID world.

Accomodation and food services did grow in May (+67,500 total), but it's been cresting after having gains of more than 100,000 a month through the end of 2021. And the JOLTS data may be indicating that these industries might be starting to "catch up" some to the huge job shortages that we've seen in those industries.

The May JOLTS data won't come out until another 3 weeks from now, so we'll see if inflation is starting to have any kind of effect on employers' hiring plans (it certainly didn't prevent big net gains in May). But it certain hadn't been happening through April, and with layoffs continuing to be low, it looks like the jobs market can continue to expand through the first half of 2022.

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