And many people quit their job to take a better job with higher starting wage & signing bonus, offered by desperate employers.
By Wolf Richter for WOLF STREET.
All the evidence – data and anecdotal – has been pointing at the same weird phenomenon: Employers are facing a “labor shortage,” even as 13 million people still claim some form of state or federal unemployment compensation, because millions of people who used to work and who could work, cannot work now or still do not want to work at the pay and benefit packages offered.
So here is another piece of this phenomenon: A record spike in unfilled job openings, along with a large number of people who quit an old job to take on a new job, incentivized by aggressive hiring efforts, such as raised wages, hiring bonuses, incentives, and better benefits.
Total unfilled job openings spiked by 590,000 in June to 10.1 million openings, seasonally adjusted, and to 10.3 million not seasonally adjusted, blowing out all prior records, up by 42% from June 2019, according to the JOLTS report by the Bureau of Labor Statistics today:
Faced with difficulties in filling open positions, employers are engaging in aggressive hiring efforts that include increased starting wages, hiring bonuses, other bonuses, better benefits, etc. – and there have been reports to this effect all over the place, from small companies to major employers such as Walmart and Goldman Sachs.
These hiring efforts, designed to bring in qualified staff in this kind of employment environment, have the effect of attracting people who already have a job, motivating them to quit that job and take that better job.
These “quits” surged to a record in April, ticked down in May, and surged again in June, to 3.9 million people who quit their jobs, the second-highest in the data, after the April record, showing just how tough the labor market is for employers, both in hiring and retaining staff, and how hot it is for people who want to work.
This comes as employers of all types reported that their payrolls, at 146.8 million workers, were still down by 5.7 million from February 2020 (green line in the chart below), according to the BLS jobs report on Friday, and as households reported that the number of people working, including the self-employed, at 152.6 million, was still down by 6.1 million from February 2020 (red line):
The sectors with the biggest spikes in unfilled job openings.
In the Professional and Business Services sector, the number of unfilled job openings in June spiked to a record 1.79 million (seasonally adjusted), up 43% from June 2019:
In Education and Health Services, the number of unfilled job openings jumped to a record 1.68 million (seasonally adjusted), up 28% from June 2019, as educational institutions continued to reopen and struggled to hire.
In the leisure and hospitality sector – mostly restaurants, bars, and hotels, but also casinos, etc. – job openings spiked from record to record and hit 1.65 million in June (seasonally adjusted), up 68% from June 2019:
At the same time, while there are 1.65 million unfilled job openings in Leisure and Hospitality, employers in the sector reported that the number of people working in the sector (at 15.2 million) was still down by 1.74 million from February 2020, according to the jobs report on Friday:
In the Healthcare and Social Assistance sector, job openings rose to a record 1.50 million in June (seasonally adjusted), up by 26% from June 2019
In the Retail Trade – auto dealers, grocery stores, general merchandise operations such as Walmart, mall stores, and all sorts of other retailers – job openings spiked to 1.15 million, up 45% from June 2019:
In Manufacturing, job openings dipped a tad from the breathtaking record spike, to 826,000, the second highest ever and up 77% from June 2019.
At the same time, employers in manufacturing reported that their payrolls, at 12.4 million jobs, were still down by 433,000 workers from February 2020 amid a red-hot boom in manufacturing and loud clamoring about difficulties in hiring qualified people:
State and Local Governments posted 787,000 job openings in June, matching the record in April, and up by 34% from June 2019 (but job openings at the federal government, not shown here, remained within the normal range during the pandemic, except for the spike for the census, which was smaller than the normal census spike):
In the Transportation, Warehousing, and Utilities sectors, job openings jumped to 476,000 in June, the highest in the data, up 41% from June 2019:
In Construction, job openings rose to 339,000 in June, among the highest levels in the data, outside of the one-month-wonder-spike in April 2019:
In the Wholesale Trade, job openings ticked up to 284,000 in June, the second highest in the data, behind only April, and was up by 26% from June 2019:
In Arts, Entertainment, and Recreation, job openings rose to 211,000, up 91% from June 2019, and the second highest after the spike in April:
This weird phenomenon of record job openings and “labor shortages” while 13 million people still claim state or federal unemployment insurance is now being tested in states that withdrew from the federal unemployment benefits, including benefits that allowed people to make more while unemployed than while working. Read… Yes, More People Went Back to Work in States that Ended the $300/Week in Federal Unemployment Benefits
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