Record US job openings, quits likely to fuel wage inflation
- Job vacancies rise by 205,000 to 11.5 million in March
- Hiring falls by 95,000 to 6.7 million
- Resignations rise by 152,000 to a record 4.5 million
WASHINGTON, May 3 (Reuters) – U.S. job openings hit a record high in March as labor shortages persisted, suggesting employers may continue to raise wages and help keep inflation uncomfortably high.
The Labor Department’s Job Openings and Turnover Survey, or JOLTS report, also showed on Tuesday that a record 4.5 million people voluntarily quit their jobs, underscoring growing wage pressures . The government announced last week that the compensation of American workers recorded its largest increase in more than three decades in the first quarter. Read more
“For the economy, this points to another strong jobs report on Friday, and for workers, this means continued strong wage increases, especially for those changing jobs,” said economist Robert Frick. corporate at the Navy Federal Credit Union in Vienna, Virginia. “Things will likely continue well into this year as the Federal Reserve’s efforts to cool the labor market are unlikely to gain traction for months.”
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Job postings, a measure of labor demand, rose by 205,000 to 11.5 million on the last day of March. The second consecutive monthly increase took job openings to the highest level since the series began in 2000. The retail sector led the rise, with an additional 155,000 unfilled jobs. Durable goods manufacturers reported an additional 50,000 job vacancies.
But job openings fell by 69,000 in the transportation, warehousing and utilities industry. State and local education had 43,000 fewer vacancies, while federal government job openings fell by 20,000.
Job postings rose in the South but fell in the Northeast, Midwest and West. Economists polled by Reuters had forecast 11 million job vacancies.
The gap between jobs and workers, which Goldman Sachs says is a better measure of labor market tightness, widened to 5.6 million from 5.08 million, a record high 3.4% of the labor force, up 0.3 percentage point from February.
According to Goldman Sachs, closing the 2.5 million midpoint gap would be enough to slow the rapid pace of wage growth.
The JOLTS data is being watched closely by the Federal Reserve, which has adopted aggressive monetary policy as it battles soaring inflation, with annual consumer prices rising at rates last seen there. 40 years ago.
The US central bank is expected to raise interest rates by half a percentage point on Wednesday and is expected to start trimming its holdings soon. The Fed raised its key rate by 25 basis points in March.
Stocks on Wall Street were trading higher. The dollar fell against a basket of currencies. US Treasury prices were mostly higher.
“Traditionally, the Fed has focused on unemployment as a measure of the number of workers who can’t find jobs,” said Lou Crandall, chief economist at Wrightson ICAP in Jersey City, New Jersey. “In the current environment, the Fed is more focused on the number of businesses that cannot find workers. The Fed’s short-term policy goal is to slow overall spending enough to reduce excess demand for labor. work.”
The job creation rate climbed to 7.1%. This figure was up from 7.0% in February and matched the all-time high in December. The job creation rate increased in establishments with 50 to 999 employees, but decreased in companies with less than 50 employees.
Hiring fell by 95,000 jobs to 6.7 million in March. Modest increases in manufacturing, professional and business services, and leisure and hospitality were offset by declines in financial activities, education and health services, public administration and trade, transportation and public services.
There are now 70% more jobs available than new hires. There was a record 1.92 jobs per unemployed person in March.
“Employers’ continued difficulty in filling positions will drive up wages and incentivize employers to automate operations or find other efficiencies to make do with smaller headcounts,” said Sophia Koropeckyj, senior economist at Moody’s Analytics in West Chester, Pennsylvania.
“These challenges will only grow as more baby boomers leave the workforce. Companies will open operations in parts of the country with more available workers or at least rely more on remote workers. who reside in areas with better demography.”
With jobs plentiful, workers are leaving in droves. Resignations rose by 152,000, bringing the total to a record 4.5 million. They were concentrated in the professional and business services industry, where quits increased by 88,000. In the construction sector, quits rose by 69,000. The number of quits rose in the South and West .
The quit rate climbed back to a record high of 3.0% at the end of 2021, from 2.9% in February. The quit rate is seen by policymakers and economists as a measure of confidence in the labor market. The higher quits rate suggests wage inflation will likely continue to pile up as companies scramble to find workers.
Layoffs increased in March, but remained at low levels. The layoff rate remained at 0.9% for a third consecutive month.
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Reporting by Lucia Mutikani Editing by Paul Simao
Our standards: The Thomson Reuters Trust Principles.
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