Employer job openings fall to two-year low
Released each month by the U.S. Department of Labor, the Job Openings and Labor Turnover Survey (JOLTS) reports the monthly change in job openings, hires, quits, layoffs and other employee separations. It provides Wall Street key insight into the health of the U.S. labor market.
On Tuesday, the latest survey reported the number of job openings across the nation at 8.83 million, a decline of 338,000 from the prior month. It was also a hefty 732,000 below Wall Street’s forecast of 9.56 million.
The latest JOLTS report reaffirms a gradual, yet steady decline in the number of job openings being posted by employers. The current 8.83 million job openings is the lowest reported number since March 2021. So far this year, the number of job openings has declined by 2.4 million. Since reaching a record high of 12.03 million in March 2022, the number of job openings in America has fallen by 3.2 million, a decline of nearly 27%.
Within the four regions of the country, so far this year, the South has experienced the largest decline in job openings. 41% (986,000) of the nation’s 2.4 million decline in job openings this year have been in the South. This is followed by the Midwest (-687,000), the West (-510,000) and the Northeast (-224,000). Locally, the number of job openings in Illinois has declined by 74,000 this year, including 45,000 last month. In Iowa, job openings have declined by 37,000, including 11,000 last month.
The 2.4 million lost job openings this year have not been evenly distributed throughout the 11 sectors of the U.S. economy. 31% of the year-to-date decline has been in the Professional & Business Services sector, which has lost 751,000 job openings. Likewise, the Leisure & Hospitality sector has seen its number of job openings fall by 631,000, representing 26% of the total year-to-date loss. Combined, these two sectors account for 57% of the net year-to-date decline in job openings. Educational & Health Services (-280,000), Trade, Transportation & Utilities (-270,000) and Manufacturing (-247,000) have also experienced a substantial drop in job openings so far this year.
Despite the continued decline in the number of job openings, Wall Street is not projecting a doom-and-gloom outlook for the U.S. labor market. The labor market still remains fairly strong. The current 8.83 million job openings is still a large number of open positions waiting to be filled. This conveys that employers still have a strong demand for qualified workers. Moreover, the 8.83 million job openings greatly exceeds the 5.84 million Americans currently unemployed – defined as those not working but actively seeking work. In other words, there’s a 2.99 million surplus of unfilled job openings.
But the labor market is not infallible – cracks are starting to form. The number of new jobs being added each month has also been steadily declining. The latest JOLTS report just provides some further evidence that the labor market’s strength is starting to gradually weaken.
Mark M. Grywacheski, Investment Advisor
Quad Cities Investment Group is a Registered Investment Adviser.
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