US job openings surged in October even as hirings went down. This data suggests that the US is bracing for a worsening worker shortage. Ultimately, this can hamper employment growth and the overall economy.
US Job Openings and Labor Turnover Survey
Last Wednesday, the Labor Department issued its monthly US Job Openings and Labor Turnover Survey (JOLTS). The report showed a steady decline in layoffs.
This is another indicator of a tightening job market. In fact, even if the number of Americans quitting their jobs fell, the total remains high.
Jennifer Lee, senior economist at BMO Capital Markets says the market isn’t celebrating soon. “Under normal circumstances, a near-record number of job openings would be something worth celebrating.
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But 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,” she said.
US Job Openings Increased to 11 Million
Job openings, which is a measure of demand for labor, increased by 431,000 to a total of 11 million for October.
This number represents the second-highest US job openings on record. In addition, the total exceeded economists’ forecasts by 600,000.
The food services industry led the surge in US job openings, which upped its vacancies by 254,000. Then, the non-durable good industry added another 45,000 jobs.
Meanwhile, the educational services sector went back to work and added 42,000 jobs. In contrast, job openings in state and local governments dropped by 115,000.
As US Job Openings Increased, Hiring Dropped
Meanwhile, hiring went the other way. US hiring dropped by 82,000 jobs to 6.5 million in October. The finance and insurance industries led the decline with a 96,000 drop in payrolls.
However, increases in hiring in educational services, especially in state and local government education, kept the total steady.
As a result, the hiring rate stood unchanged at 4.4%. In fact, for every unemployed American, there are about 1.5 job openings.
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In addition, the government reported US nonfarm openings increased by 210,000 jobs in November. These are the fewest openings since December.
In contrast, October reported an increase of 546,000 jobs. As a result, the unemployment rate fell to a 21-month low of 4.2%.
Employment Still Below February Peak
US employment rates are still 3.9 million jobs below their February 2020 peak. However, experts believe that number does not accurately reflect the labor market’s health.
The shortfall includes Americans who chose to retire from their jobs. In the JOLTS report. layoffs fell by 35,000 to 1.361 million. This represented an unchanging rate of 0.9%, which is the rate for the third straight month.
Resignations fell by 205,000 in October. This translates to a still high total of 4 million. Several industries contributed to the decline.
This includes transportation, warehousing, and utilities. Finance and insurance, plus arts, entertainment, and recreation also reported significant contributions.
In addition, 21,000 more Americans quit their state and local government jobs. From 3.0% in September, resignation rates fell to 2.8%.
Watch the Yahoo Finance news video reporting that US job openings increased to 11 million in October:
What do you think of the state of US job openings? Do you think the market is gearing up for a labor shortage?
Let us know what you see in the current labor market conditions. Share your comments below.