Still a tight labor market for many industries, but the massive churn slows.
By Wolf Richter for WOLF STREET.
Funny how the breathless headlines about global layoffs in 2022 and early 2023 by tech and social media companies have faded since spring. And then job openings in the “Information” sector, where some of them are grouped, started spiking again.
“Information” is a small sector (3 million employees) engaged in web search portals, data processing, data transmission, information services, software publishing, motion picture and sound recording, broadcasting including over the Internet, and telecommunications. The data jumps up and down from month to month, so we look at the three-month moving average to see the trends.
The reason I show Information up front is because it’s funny how the layoff binge-announcements – one of the factors last year that put us at WOLF STREET on intense recession watch – have turned into a job-openings binge. Note, the data is not based on online job postings, but on surveys of 21,000 company sites, released today by the Bureau of Labor Statistics.
Overall Job openings jumped in August to 9.61 million, back where it had been in May, thereby filled in the drops in June and July, and so kept the three-month moving average for August roughly unchanged at 9.23 million, according to today’s data from the Job Openings and Labor Turnover Survey (JOLTS) of 21,000 work sites.
In 2021 and early 2022, part of the surge in job openings was driven by a spike in voluntary quits, where workers quit one job to jump to a better job amid large-scale labor shortages. When these workers jumped ship, they left job openings behind. Now quits have subsided from this spike, as we’ll see in a moment, so there is less churn in the labor force; and by not quitting, workers aren’t leaving behind job openings, which caused part of the surge of job openings to unwind.
Those 9.23 million job openings (three-month moving average) are still 29% above the same period in 2019, indicating that some industries are still having trouble staffing up to meet demand. This includes “Information” depicted above and some other big industries we’ll look at in a moment.
Layoffs and discharges were roughly unchanged in August dipped to 1.68 million. The three-month moving average irons out some of the monthly ups and downs. At 1.64 million for August, it remains below the lows before the pandemic, and 9.1% below the same period in 2019.
In the years before the pandemic, layoffs and discharges averaged 1.8 million per month, which was part of the normal course of business. During the Great Recession, monthly layoffs and discharges topped out at 2.6 million. In March 2020, they blew through 13 million.
Quitting is less appealing. Voluntary quits in August ticked up to 3.64 million. But the three-month moving average shows the trend, and the trend is down.
It seems, all this layoff-talk and the actual layoffs that took place last year and earlier this year have reduced the enthusiasm by workers to look for the greener grass on the other side of the fence.
It seems people are more willing to hang on to the jobs they’ve got, or employers have responded with higher pay and better working conditions to hang on to their workers, or a combination of factors.
The drop in voluntary quits is a sign that the immense churn in the labor force is subsiding, which is a big relief for employers.
Hires — fewer quits, therefore fewer open jobs to fill — have been on a downtrend as well. In August, new hires rose to 5.86 million. But the three-month moving average dipped to 5.87 million, the lowest since March 2021 and right back where it had been in the Good Times before the pandemic.
Job openings by largest private-sector industry categories.
Not all industries face the same labor issues. So here are the job openings of the largest industry categories.
Professional and business services (22.4 million employees), include some of the tech and social media companies (others are in “information” or in other categories): Professional, Scientific, and Technical Services; Management of Companies and Enterprises; Administrative and Support, and Waste Management and Remediation Services.
Job openings in August jumped by 509,000, pushing up the three-month moving average to 1.64 million, after a year-and-half of mostly declines. The three-month moving average is still 28% above the same period in 2019:
Healthcare and social assistance (21 million employees): the three-month moving average of job openings has hovered all year in the same high range of 1.72 million to 1.88 million. In August, the three-month moving average ticked up to 1.74 million, 46% higher than in the same period in 2019:
Leisure and hospitality (16 million employees): The three-month moving average of job openings has been on a consistent downtrend. In August, it ticked down to 1.19 million. But it’s still 25% higher than in the same period in 2019:
Retail trade, (16 million employees): The sector normalized in mid-2022 and has trended lower since then. This sector includes brick-and-mortar retailers as well as the retail-related employees of ecommerce operations, but not their tech workers, warehouse workers, drivers, etc.
Mall stores have been at the core of the brick-and-mortar meltdown, as I have called it since 2016, as Americans have shifted much of their mall-shopping to ecommerce. Countless stores have been shuttered, once lively malls have turned into zombie malls to be bulldozed and redeveloped into housing or whatever else. But employment at some segments of brick-and-mortar retail is doing well, such as grocery stores, auto dealers, gas stations, and cannabis shops. At many others, employment has been gutted.
Ecommerce is booming, but ecommerce is structurally shifting employment from retail locations to warehousing and transportation.
In August, the three-month moving average of job openings fell to 705,000, down by 14% from the same period in 2019:
Manufacturing (13 million employees). Job openings in August jumped by 72,000, which pushed up the three-month moving average a tad to 580,000, the first increase since May 2022. Job openings are up 28% from the same period in 2019:
Construction, all types (8 million employees): Job openings had dropped sharply in early 2023 on the horrendous rains and flooding on the West Coast over the three-month period. When the waters receded, job openings bounced off.
In August, the three-month moving average ticked down to 363,000 job openings, up by 18% from the same period in 2019:
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