There are 11 million open jobs as the quitting spree continues: 'It's still a very tight labor market'
There were 11 million job openings while hiring remained steady and quitting cooled slightly in October, according to the Labor Department's latest Job Openings and Labor Turnover report.
Despite the small drop in quits, turnover remains historically high as 4.2 million people quit their job in October, down from a record-high 4.4 million people, or 3% of workers, who quit in September.
Nick Bunker, economic research director at jobs site Indeed, says the latest JOLTS numbers paint a picture where workers still have the advantage to leverage the tight market for higher pay or better work conditions, or else have their hand at plenty of opportunities elsewhere.
Employers are having trouble filling open jobs
October's robust 11 million job openings is just below a recent high of 11.1 million vacancies in July. Openings increased the most in accommodation and food services, nondurable goods manufacturing, and educational services, while they decreased the most in state and local government, excluding education.
The rate of hiring remained about the same in October compared to the month prior, with 6.5 million jobs being filled. Hiring increased in educational services and in state and location government education, but decreased in finance and insurance.
The "dramatic" gap between job openings and new hires in October shows it's taking a lot of time for employers to fill open positions, says Gad Levanon, chief economist at the Conference Board, a think tank.
While hiring is strong thanks to an "extraordinary" rise in demand for goods and services during pandemic recovery, Bunker says, the demand for workers remains even stronger. The unemployment rate dropped to 4.2% even as more people rejoined the labor force and looked for jobs in November.
There were 67 unemployed workers per 100 job openings in October 2021, even tighter than the roughly 82 unemployed workers per 100 job openings in February 2020 before the pandemic.
Quitting slowed across leisure and hospitality
October's slight drop in turnover was driven by a decrease in quitting activity in the leisure and hospitality sector, which could signal that the benefits of job-hopping, like finding better pay and work, are waning in the sector over time.
Quitting also decreased across transportation, warehousing, and utilities; finance and insurance; and arts, entertainment, and recreation. Meanwhile, turnover increased in state and local government, excluding education; and in mining and logging.
Bunker notes that quitting is up most in lower-wage sectors where demand is high, particularly for in-person services, whereas quitting is down slightly in some office-based, higher-wage work that can be done remotely.
Omicron adds uncertainty to the job market
Overall, "it's still a very tight labor market," Levanon says, and employers have responded by offering higher pay and bonuses for new hires throughout the year. New Conference Board data shows companies are setting aside a record-high 3.9% of their budgets to raises in 2022, suggesting greater efforts to retain employees in the new year, as well.
But the state of the pandemic could change the job market picture. Notably, the JOLTS report captures robust job openings, steady hiring and sky-high quitting in October before the rise of Covid cases in many parts of the U.S. driven by the delta variant and the recent detection of the omicron variant.
If the U.S. experiences another rise of Covid-19 cases through the winter, consumer demand for in-person services and experiences could wane, which could impact hiring needs. Meanwhile, people who continue to be concerned about the health risks of the virus, or who must handle changing child-care challenges, could be less inclined to take on paid work, Bunker says. Workers could also feel less confident about being able to quit their job and find a better one, Levanon adds.
Further, the Labor Department posted a disappointing 210,000 new jobs in November as hiring across hospitality was muted and the retail sector lost jobs despite the traditional holiday hiring season.
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