Anyone expecting signs of an abatement in America’s so-called “Great Resignation” was disappointed on Tuesday.
Government data showed the number of job openings on the last business day of March stood at 11.549 million, a new record.
Hires, by contrast, fell slightly, leaving the widest gap ever (figure below) and underscoring the “funhouse mirror” characterization of the US labor market.
That suggests very little progress along the road to normalization. To say frictions remain would be to materially understate the case.
Quits hit a new record, rising 152,000 to 4.536 million (figure below), while the rate ticked back up to an all-time high at 3%.
Nearly 900,000 people quit a leisure and hospitality job in March. Around 800,000 of those voluntary separations were concentrated in accommodation and food services, underscoring rampant turnover.
Clearly, competition for workers remains intense. Layoffs loitered near record lows.
For those wondering, the ratio of openings to the number of Americans counted as officially unemployed is now close to two (figure below).
That comes with any caveats readers might feel are appropriate vis-à-vis who counts as “unemployed.”
Tuesday’s data came on the heels of figures showing compensation and wages rose the most on record during the first quarter, even as inflation-adjusted wage growth fell rapidly.
The Fed is sure to cite last week’s ECI data in support of the Committee’s unfolding hawkish pivot, and the JOLTS figures did nothing to change the narrative. April payrolls, due Friday, are expected to show another robust monthly gain (figure below).
“A hallmark of this cycle’s recovery has been the mismatch between available jobs and a labor force participation rate that has improved significantly but remains well off the levels we saw before the pandemic,” BMO’s Ian Lyngen and Ben Jeffery wrote Tuesday, adding that “in a more traditional environment, the level of the participation rate may hold the needed weight to keep Powell more patient [but] the specter of durably spiraling wages has inspired the Fed’s hawkish pivot with the aim of slowing the labor market that the Chair has already suggested might be too tight.”
“The key to a soft landing,” Goldman said last month, “is to generate a slowdown large enough to persuade firms to shelve some of their expansion plans, but not large enough to trigger sharp cuts in current output and employment.”
As I put it at the time, that would be impossible to manage at the municipal level. At the national level, it’s a laughable ask.
Read more: Of The Fed, We Now Demand The Impossible
Fed tightening can work the labor problem from both ends. Demand reductions, yes. But also a potential increase in supply as retirees and the soon to be retired rethink their math and budgets in the face of falling assets.
@Fatmoose, agree – I know some recent retirees now looking for work, and prospective retirees reconsidering their plans.
Put those boomers to work, so entitled…
Sure, because the job market is so positive for folks in their 60’s.
The folks in their 60s and 70s I know who are looking for work, are looking for part-time work to supplement retirement and/or as something to do, not trying to return to work full-time at the same level than they reached before retiring. Within those limited parameters, they seem to be having better success finding work than in previous times.
I can believe that’s true for those in good circumstances and retirement. Heard an article from the WSJ just today on the way to work about retired folks heading back to the workforce after being hit by inflation on fixed income. Interesting.
Yes, but what kinds of jobs these people are quitting- as you wrote they seem to be, “concentrated in accommodation and food services.”
Interesting article in the WSJ a few weeks ago about people looking for work, but not being given enough hours after being hired, specifically in the food industry. Also talks about the huge turnover and churn in these industries that may have some to do with the statistics.
https://www.wsj.com/podcasts/the-journal/why-workers-cant-get-enough-hours-even-in-a-jobs-boom/3905C91E-77EF-4DAD-B6BC-0A085B5BC2E9