The number of job openings and quits each held at historically elevated levels in December, with worker leverage remaining high as labour demand persisted.
Vacancies across the U.S. totalled 10.925 million at the end of 2021, the Labor Department said in its latest Job Openings and Labor Turnover Summary (JOLTS).
This compared to 10.775 million openings in November, according to the revised monthly print. Consensus economists had anticipated December vacancies would come in at 10.3 million, according to Bloomberg data.
The latest report represented a seventh straight month that job openings held above the 10 million level, underscoring the ongoing tightness in the labor market as employers struggle to find enough workers to fill positions. Vacancies had set an all-time high of nearly 11.1 million in July, and trended only slightly lower since then. Before the pandemic, job openings had averaged around 7 million per month throughout 2019.
And beneath the surface, churn within the labour market has also increased over the course of 2021. Another 4.3 million individuals quit their jobs in December, coming down only slightly from a record high of 4.5 million in November. And the quits rate was little changed at 2.9%, or just a tick below November's record rate of 3.0%. A higher quits rate typically indicates workers are more confident that they will be able to find new jobs after voluntarily leaving their current ones.
By industry, some of the largest increases in job openings were in service areas of the economy most impacted by the latest wave of the virus. Vacancies in food services and accommodation rose by 133,000 to top 1.5 million. Openings in non-durable goods manufacturing and state and local government education each rose by 31,000 during the month.
High labour demand has been one factor helping push up wages for workers, but the persistent vacancies have also posed concerns to employers still recovering from the pandemic.
"With constraints on labor supply, employers are having difficulties filling job openings and wages are rising at their fastest pace in many years," Federal Reserve Chair Jerome Powell said during a press conference last week. "While labor force participation has edged up, it remains subdued, in part reflecting the aging of the population and retirements."
Powell — along with many other economists — also pointed out that the latest wave of the Omicron variant will likely prolong the tight labour market conditions, deterring workers who might otherwise have rejoined the labor market from returning to work for fear of infection.
And other major labour market metrics have also pointed to the present tightness of conditions. The Conference Board's labour differential — or figure showing the percentage of people reporting jobs are plentiful, less those who say jobs are difficult to find — held at a historically high level of over 43.0 for eight consecutive months. And for December, 49% of small business owners reported they had job openings they could not fill in the current period, with this percentage rising by 1 point compared to November.
SOURCE: Yahoo Finance
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