For every job opening in America, there’s now barely more than one unemployed person available to take it.The number of job openings in the U.S. has touched another record high while the number of Americans readily available to fill those roles trends lower, according to Labor Department data released Friday.
It’s a sign the labor market is continuing to tighten--and that employers will need to attract those who aren’t actively looking for work if they intend to keep hiring. And so far this year, they have kept hiring, adding more than half a million people to payrolls.
The latest Labor Department data showed job openings rose in January to a seasonally adjusted 6.3 million, the highest level on record back to 2000. But the number of openings has been at or near record levels since July 2015.
What’s changed is the number of unemployed people, which is consistent with steady hiring.
In mid-2015, there were 2.3 million more unemployed people than open jobs. By January, the gap had narrowed to 372,000.
It helps shift the narrative from one where the unemployed aren't well-matched for available jobs to one where there just might not be enough job seekers to meet the demand for labor. (To be considered unemployed by the Labor Department, you must be actively seeking a job.)
In February, employers hired a net 313,000 workers, and did so because a large number of Americans went directly from not even looking for a job to working.
“The tighter job market is bringing people back into labor force, including people who a few years ago we thought might not come back,” said Jed Kolko, chief economist with the job site Indeed. That includes people who were long-term disabled, or who thought they lacked the skills employers needed.
Mr. Kolko said many employers are raising wages, and that helps those who are out of the workforce to consider returning. He also said firms are offering more training to address skills shortfalls, and are considering a wider population of people than they had in the recent past.
He noted that while nationally there is basically an opening for every available worker, the labor market looks different in every region and industry.
On an industry level, the highest rate of openings occurred in accommodation and food services, a relatively low-skill field. That’s further evidence that a lack of skills isn’t the only driver of record-high openings.
But it also suggests wages might need to rise more to bring people off the sidelines and into those jobs.
-The Wall Street Journal.