Home Economic Trends Job Openings Rates Hit Record Highs – Robert Hughes (04/09/2021)

Job Openings Rates Hit Record Highs – Robert Hughes (04/09/2021)

The latest Job Openings and Labor Turnover Survey from the Bureau of Labor Statistics shows the total number of job openings in the economy rose to 7.367 million in February, up from 7.099 million in January. The number of open positions in the private sector increased to 6.732 million in February, the highest level since January 2019 (see first chart). Private-sector openings are well above the low of 3.996 million in April 2020 at the height of government-imposed lockdowns. The private-sector job-openings rate, openings divided by the sum of jobs and openings, was 5.2 percent, up from 5.0 percent in January and a new record high (see first chart).

The industries with the largest number of openings were education and health care (1.565 million), professional and business services (1.390 million), and trade, transportation, and utilities (1.364 million; see second chart). The highest openings rates were in professional and business services (6.3 percent), education and health care (6.3 percent), and leisure and hospitality (6.3 percent; see third chart).

The rise in private job openings was a function of hires, separations and changing labor requirements. Private hires in February rose to 5.446 million from 5.102 million in January. At the same time, the number of private-sector separations rose to 5.107 million in February, up from January’s 5.007 million. Within separations, private quits were 3.164 million (versus 3.140 million in January) and layoffs were 1.668 million, up from 1.634 million in the prior month. The total separations rate rose to 3.8 percent from 3.7 percent in the prior month with the private sector experiencing a rate of 4.2 percent, up 0.1 percentage points from 4.1 percent January.

From the worker perspective, labor market conditions improved again in February. The number of openings per job seeker (unemployed plus those not in the labor force but who want a job) rose to 0.423 in February, up slightly from 0.414 in January, and well above the April 2020 low of 0.156 but still well below the 0.721 peak in October 2019. In the economic expansion of the 2000s, the number of openings per workers peaked at 0.450 (see fourth chart).

Overall, the data relating to the labor market have improved significantly over the past month. Today’s data on job openings and turnover along with a strong jobs report for March and declining trend in the number of weekly initial claims for unemployment insurance provide an expanding basis for optimism. Furthermore, the ongoing distribution of vaccines is leading to the reduction of restrictive government lockdown rules and the resumption of economic activity free from lockdown distortions.