Labor Market

The number of open jobs up, with employers still looking for skilled workers

Report: The Federal Reserve says employers still can't find enough skilled workers; The U.S. Department of Labor says the number of open jobs hit 10.1 million in April.

A pair of new reports – one from the U.S. Department of Labor and one from the Federal Reserve System – show continued hiring across many industries, pointing to a healthy labor market.

Job Openings Rise, Layoffs Fall

First up, a quick look at the Job Opening and Labor Turnover Summary, also know as the JOLTS report.

As of the last business day in April, the number of job openings increased to 10.1 million – after hitting a two-year low in March. The biggest increases were in retail trade (+209,000), health care and social assistance (+185,000) and transportation, warehousing, and utilities (+154,000).

Meantime, the number of layoffs for the month dropped 264,000 and voluntary quits decreased by 49,000.

According to the report, “establishments with 1 to 9 employees saw an increase in their job openings rate and a decrease in their layoffs and discharges rate. Establishments with more than 5,000 employees saw an increase in both their job openings and hires rates.”

What the Business Leaders are Saying

According to the Fed’s Beige Book report – which measures economic conditions around the country every six weeks through on the ground conversations with local business leaders – hiring is up in most of the system’s 12 districts, though it is growing at a somewhat slower pace.

“Overall, the labor market continued to be strong, with contacts reporting difficulty finding workers across a wide range of skill levels and industries. That said, contacts across Districts also noted that the labor market had cooled some, highlighting easier hiring in construction, transportation, and finance.

“Many contacts said they were fully staffed, and some reported they were pausing hiring or reducing headcounts due to weaker actual or prospective demand or to greater uncertainty about the economic outlook. Staffing firms reported slower growth in demand. As in the last report, wages grew modestly.”

A Sampling of Takeaways by Fed District

Boston: “On the labor supply side, a workforce development contact continued to see many potential job candidates struggling with persistent barriers to labor force engagement. The barriers included childcare and eldercare responsibilities, housing and transportation instability, and health challenges.”

Philadelphia: “Employment appeared to edge up after holding steady during the prior period. Contacts noted relatively few layoffs and observed that when layoffs or plant closings occur, other firms scoop up the workers. Most firms reported that labor availability continued to improve. A leisure firm noted shortages remain for housekeeping staff and cooks, but that was true before the pandemic.”

Richmond: “Firms continued to grow their employment levels modestly over the most recent reporting period. Several firms reported having multiple open roles they were not able to fill due to a tight labor market. A textile manufacturer was struggling to hire the ‘next generation’ of workers to replace retiring workers, as the average age of new hires is in the fifties. Many other firms, on the other hand, were adequately staffed and held employment levels unchanged.”

Atlanta: “Several contacts noted they were increasing hiring standards. The majority of firms indicated that most positions were easier to fill, and retention had improved. Some challenges filling certain roles persisted; labor shortages varied from market to market but were most acute in South Florida, where housing availability and affordability were cited as limiting the pool of candidates.”

Kansas City: “Contacts reported that worker retention improved further in recent weeks. Several businesses also noted that competition for talent from businesses in different industries became less prevalent recently. Most businesses indicated that some of the slowness in hiring activity was also due to ongoing labor shortages, particularly for skilled workers in jobs with limited education requirements.”

San Francisco: “Labor supply remained tight across several sectors, including health care, hospitality, food services, and aviation. However, contacts from retail, manufacturing, transportation, finance, and business services reported fewer issues filling positions. Although some employers are still facing difficulties finding skilled workers, reports across the District indicated improvements in employee turnover and retention rates.”

Bottom Line

Employers across many industries are hiring, or want to hire, but they are still having trouble finding workers with the skills the jobs require. Also, job seekers and workers wanting to advance in their jobs are facing some barriers that are preventing them from attaining those needed skills.

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