Job openings rise to new record-high in April as US labor shortage slows hiring

Hiring sign labor market coronavirus
People walk by a Help Wanted sign in the Queens borough of New York City on June 04, 2021 in New York City.

  • US job openings jumped to 9.3 million from 8.3 million in April, setting a new record high.
  • The reading comes in above the median estimate of 8.2 million and marks a fourth straight gain.
  • Roughly 1.1 Americans competed for every opening, down from 1.2 as the labor shortage intensified.
  • See more stories on Insider’s business page.

Demand for workers in the US intensified in April as nationwide reopening squared off with an unprecedented labor shortage.

Job openings rose to a record-high 9.3 million from 8.3 million in April, according to Job Openings and Labor Turnover Survey, or JOLTS, data released Tuesday. Economists surveyed by Bloomberg held a median estimate of 8.2 million openings.

The reading marks a fourth consecutive jump in openings. The report also sheds more light on how the labor market performed through April. The month’s nonfarm payrolls report, released in early May, showed hiring drastically slowing as businesses reported difficulties finding workers.

The April payroll gains have since been revised slightly higher, and data published last week showed hiring rebound in May. Yet job growth is still down from the pace seen in March despite openings climbing further. Democrats have attributed the slowdown to a push for higher wages, while Republicans largely blame enhanced unemployment insurance.

The Tuesday JOLTS report showed fewer Americans competing for each opening. About 1.1 available workers existed for each open job, down from 1.2 in March. The reading compares to a pre-pandemic average of 0.8 and a crisis peak of 5.

A detailed look at April hiring and firing

Like the jobs report published on Friday, the JOLTS release includes more a granular look at which sectors thrived and which lagged, albeit one month behind the Bureau of Labor Statistics’ report.

The accommodations and food services sector added the most job openings throughout April, with a gain of 349,000 positions. The educational services sector shed 23,000 openings, setting the month’s largest decline.

Separations, which include layoffs and quits, jumped by 324,000 to 5.8 million.

Quits rose to a record-high 4 million from 3.6 million. Layoffs and discharges fell by 81,000 to 1.4 million, mirroring the downward trend in weekly jobless claims.

The US hiring rate held steady at 4.2%. That’s just above the pre-pandemic trend and suggests the labor shortage intensified through April.

The latest labor-market diagnosis

While the JOLTS report lends more detail to how the economy fared in April, Friday’s jobs report gave the most up-to-date look at the labor market’s performance. The US added 559,000 nonfarm payrolls last month, missing the median estimate of 674,000 jobs but improving significantly from the April pace.

The unemployment rate fell to 5.8% from 6.1%. The decline, powered by strong hiring and a slight drop in labor-force participation, beat the median estimate of 5.9%.

Economists largely viewed the report as a lukewarm print. “With unemployment benefits set to fade in the fall, we may be waiting until the end of summer before we see clear evidence of a fundamentally healing labor market,” Seema Shah, chief strategist at Principal Global Investors, said.

The Friday report also showed wages surging for a second consecutive month. Economists have looked to average hourly earnings for signs of whether labor shortages are merely overblown anecdotes or signs of a more widespread shift. Combined with the marked climb in openings through the spring, the strong upward pressure on wages backs up reports that Americans are holding off on returning to work.

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Job openings hit a record high in March – showing the gap between job postings and hirings was huge even before April’s jobs report

Hiring jobless December
  • US job openings rose to 8.1 million from 7.4 million in March, according to JOLTS data.
  • That lands above the median estimate of 7.5 million and marks a record number of openings.
  • The hiring rate climbed to 4.2% from 4% as stimulus and vaccinations fueled reopening.
  • See more stories on Insider’s business page.

Job openings grew to record highs in the US in March amid continued vaccination and fresh stimulus.

The data shows businesses reopening along with the country, yet last Friday’s jobs report for April indicated employers have since had trouble filling those jobs.

Openings rose to 8.1 million from 7.5 million, according to Job Openings and Labor Turnover Survey, or JOLTS, data published Tuesday morning. The median estimate from economists surveyed by Bloomberg was for 7.5 million openings. The reading marks a third straight increase and places job openings at their highest level ever.

The food services, accommodations, and state and local government education sectors added the most openings throughout the month. The health care and social assistance sectors shed 218,000 jobs, marking the largest decline of the month.

Separations, which count layoffs and quits, dropped to 5.3 million from 5.4 million.

Quits climbed by 125,000 to 3.5 million. Layoffs and discharges sank by 243,000 to 1.5 million.

The country’s hiring rate rose to 4.2% from 4%, according to the report. That’s just above the pre-pandemic trend. Yet with roughly 10 million Americans unemployed, the pace signals the labor market recovery will take years if hiring doesn’t accelerate further.

Data published Friday suggests that such acceleration isn’t likely, at least not in April. The US added just 266,000 jobs last month, grossly missing the median estimate for 1 million payrolls. The reading also marked a sharp deceleration from the job growth seen in March. Unless the April figures prove to be noise or are revised higher, the report hints the labor market recovery hit major snags despite the broad easing of economic restrictions.

Some attributed the weak payroll growth to reports of labor shortages, but JOLTS data showed plenty of Americans searching for work. About 1.2 Americans competed for each job opening in March. That’s down from the February reading of 1.3 and the pre-pandemic level of about 0.8.

To be sure, a phenomenon known as reallocation friction can keep companies from hiring even in areas with an abundance of jobless Americans. Experts have warned that the post-pandemic economy will be drastically different from that seen in early 2020. The types of jobs available to workers could be very different, and jobless Americans might need time to decide which sector to work in if they have to make such a pivot.

The JOLTS report provides more detail around what was largely an encouraging month for the labor market. The country added 770,000 payrolls as Democrats’ $1.9 trillion stimulus supercharged spending. The unemployment rate fell to a pandemic-era low of 6%.

While the April jobs report showed the recovery stagnating last month, other indicators have shown more promising trends. Daily COVID-19 case counts fell to an 11-month low on Sunday and are swiftly trending lower as vaccination continues. Filings for unemployment benefits have similarly declined over the past four weeks and most recently slid below 500,000 for the first time since March 2020.

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