Still a contorted labor market with massive churn and job hopping, but slightly less than in early 2022. Only retail is back to the old normal.
By Wolf Richter for WOLF STREET.
At every press conference following the FOMC monster-rate-hike meetings, Chair Powell discussed the tight labor market: The imbalance between high demand for labor and the tight supply of labor. And some of the data points he normally cites were released today. Two of the most important ones — job openings and layoffs — tightened further. The others remains very tight.
This is based on what 21,000 businesses said about the number of job openings they have, the number of people they actually hired, the number of people they laid off, the number of people who quit, etc.
Job openings rose by 437,000, to 10.7 million seasonally adjusted, up by 51% from September 2019. Not seasonally adjusted, they rose by 306,000 to 10.7 million, according to the Job Openings and Labor Turnover Survey (JOLTS) by the Bureau of Labor Statistics. Job openings increased in all major sectors except wholesale trade, government (mostly education), and manufacturing. But even in manufacturing, the number of unfilled openings, though it dipped, remained huge – up by 84% from three years ago, just slightly less huge than before.
Job openings had come down somewhat in the prior month, and there had been hopes that they would further track lower to show that the demand for labor might back off. But that didn’t happen, and instead, the number of unfilled jobs moved deeper into the astronomical zone.
Layoffs & discharges fell from already low levels to even lower levels, near the record lows in late 2021. Employers reported that they laid off 1.33 million people in September, down from 1.49 million in August, and down by 33% from September 2019.
Small scale layoffs, and most people were quickly rehired.
There have been a lot of stories in the news about layoffs at famous or infamous companies, including at the most speculative ones that had gone public with enormous hype and hoopla via SPAC merger or IPO, and whose stocks then imploded.
But they were mostly small-scale layoffs in the dozens or hundreds, and a few times a couple of thousand people. Among the big profitable companies, there were layoffs in some divisions, while other divisions still hired. This includes big tech. But it also includes companies like Ford, which has been implementing buyouts in its ICE division while hiring manically in its EV division.
And most people that were laid off found new jobs quickly, given the still enormous number of job openings across most industries. Many people already had a new job lined up by the time they lost their old job.
We see this confirmed by the actual number of people who filed for unemployment insurance with their state unemployment offices, which is reported weekly by the US Department of Labor. Last Thursday, the number of initial claims for unemployment insurance, at 217,000, was in the same low range where it had been all year and below nearly all prior lows.
This confirms that most of the people who were laid off found a job so quickly or already had a new job lined up that they didn’t file for unemployment compensation.
For the labor market to soften meaningfully, we would have to see the number of unemployment claims rise above the 300,000 mark.
Voluntary “quits” dipped from August, but were still higher than in July, and remained in the astronomical zone, a sign of still massive churn and job hopping.
At 4.06 million, the number of workers who voluntarily quit jobs was still up by 18% from the already high levels of September 2019. But the declines off the peak are indicating that there is a little less confidence among employees that they might get a better job, or that the job offer that they have is actually a better job, and so there is a little less job hopping than earlier this year.
The number of new hires declined to 6.08 million people in September, but remained higher than in any but one month before the pandemic. Hiring is still handicapped by difficulties in actually being able to hire people away from other employers.
And employers may now also be a little less aggressive in offering higher pay to attract workers than in prior months, which could be another sign of a slight cooling of the red-hot labor market.
Most of the 1.33 million people who were laid off and most of the 4.06 million people who “quit” became part of the 6.08 million people who were hired by other employers.
The large number of “quits” and the large number of “hires” show that there is still a lot of churn and job-hopping, as workers can still arbitrage the tight labor market for better pay and benefits, or a better job in different industry. But here we can see that some of the pressures on the labor market are easing just a tad.
Job openings in major industry categories.
Professional and business services, a large industry category with 22.4 million employees in Professional, Scientific, and Technical Services; Management of Companies and Enterprises; Administrative and Support, and Waste Management and Remediation Services.
- Job openings: +104,000 to 1.92 million
- From September 2019: + 53%
Information, a small category with about 3 million employees in web search portals, data processing, data transmission, information services, software publishing, motion picture and sound recording, broadcasting including over the Internet, and telecommunications. This is where some or the mediatized small-scale layoffs have been.
- Job openings: +23,000 to 214,000
- From September 2019: +20%
Healthcare and social assistance, a large category with about 21 million employees, set a new record in job openings, amid numerous reports on continued staffing shortages:
- Job openings: +115,000 to 2.10 million
- From September 2019: +88%
Leisure and hospitality, with about 16 million employees, amid numerous reports of hotels and restaurants still struggling with staff shortages:
- Job openings: +234,000 to 1.61 million
- From September 2019: +63%
Retail trade, with about 16 million employees. This sector has now normalized in terms of job openings.
- Job openings: + 3,000 to 795,000
- From September 2019: +7%
Education – as depicted by state & local government job openings, most of which are in education amid continued teacher shortages:
- Job openings: -23,000 to 877,000
- From September 2019: +40%
Manufacturing, with about 13 million employees:
- Job openings: -40,000 to 806,000
- From September 2019: +84%.
Construction, with nearly 8 million employees, in all types of construction, from single-family houses to powerplants:
- Job openings: +36,000 to 422,000, the third-highest ever, behind only March and April 2022
- Since September 2019: +27%
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