America's employers have 11 million job postings to fill
In July, the U.S. economy had a record 11.1 million job openings that employers couldn’t fill. As of October, that number remains essentially unchanged — at 11.0 million job openings.
Data from the Bureau of Labor Statistics released Wednesday confirmed the persistence of hiring difficulty for America’s employers. From restaurants to retail, industries across the economy continue to operate with fewer workers than pre-pandemic levels.
Although the availability of jobs is leading to greater bargaining power for job seekers, economists worry that an inability to staff up firms could drag on economic growth.
“No employer is in a celebratory mood. It is difficult to fill orders or meet customer demands if there are not enough people to do the actual work,” said BMO Capital Markets Senior Economist Jennifer Lee.
The Federal Reserve, the nation’s central bank, noted anecdotes of firms having to actively turn down business or close because of a lack of staff. The Fed’s Beige Book (covering the month of November) detailed school closures in the Pacific Northwest due to a lack of teachers and a pullback in operating hours at restaurants in New England. In the St. Louis region, recruiters at a transportation job fair outnumbered the number of job seekers that showed up.
At the Fed’s regional outpost in Dallas, “several firms noted worsening issues with retention and hiring, with some noting having to terminate contracts or turn away business due to lack of capacity.”
Employees still have more power
The labor market picture remains favorable for workers, who generally have more power now to leave a job and shop for a new one.
Turnover appeared to slow in October. The BLS data, part of the Job Openings and Labor Turnover survey, showed the quits rate (the number of quits as a percentage of total employment) decreasing to 2.8%. In September, that figure was at a record 3.0%.
But workers still have the upper hand against recruiters, by and large. Employers are having to raise wages, lower barriers to hiring, and improve working conditions to entice new hires.
“Firms are desperate to recruit and are willing to pay more for staff,” said James Knightley, chief international economist at ING.
But a labor market puzzle remains in the nearly 4 million people that are still on the sidelines of the labor market, compared to pre-pandemic levels. Despite the availability of vaccines and the expiry of supplemental unemployment insurance, pulling those workers back into jobs that are readily available appears to be a bigger challenge than initially anticipated.
Early retirements and child care needs have raised questions about whether or not all of those 4 million people will ever return to the workforce. Policymakers say it is too early to say for sure.
“I think these are all positive signs that suggest it's a fluid labor market right now,” San Francisco Fed President Mary Daly told Yahoo Finance Nov. 23. “Not as smooth as we'd like. But way too early to count these people out and say that they're never coming back and a sustainably growing economy wouldn't attract them.”
Brian Cheung is a reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.
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