Job Openings Remain at Elevated Level in May | Economy

The number of job openings stood near its record of 9.2 million at the end of May, the Bureau of Labor Statistics reported on Wednesday, suggesting employers will continue to struggle to hire workers.

The 9.2 million was just shy of the record 9.3 million a month earlier.

Openings increased in other services, with 109,000 more jobs, state and local government education, up 46,000, and educational services, which increased by 35,000. Openings decreased in arts, entertainment and recreation, down 80,000. State and local government, excluding education, saw a decrease of 56,000, and the federal government recorded a drop of 17,000.

Employers added 850,000 new workers to their payrolls in June in one of the strongest months yet for the labor market. And the number of Americans filing new claims for unemployment dipped to 364,000 last week, its lowest level since March of 2020 when the coronavirus pandemic began.

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However, companies across a wide swath of the economy report significant difficulty filling jobs, with many having to raise wages or other incentives such as hiring bonuses and flexible hours.

According to the National Federation of Independent Business’ monthly jobs report, 46% of small business owners said they had jobs they could not fill, slightly less than in May and more than double the 48-year historical average of 22%.

“In the busy summer season, many firms haven’t been able to hire enough workers to efficiently run their businesses, which has restricted sales and output,” said NFIB chief economist Bill Dunkelberg. “In June, we saw a record high percent of owners raising compensation to help attract needed employees and job creation plans also remain at record highs. Owners are doing everything they can to get back to a full, productive staff.”

After a strong recovery from the pandemic, the economy is expected to slow to a more normal pace in the second half. Some businesses still are having problems getting supplies, while consumers have switched their spending away from big ticket, long-lasting items to dining out, travel and recreation.

“The labor market continues to add jobs, which rose a better-than-expected 850k last month,” Joe LaVorgna, Natixis CIB managing director and chief economist of the Americas, wrote Tuesday. “However, the rate of job growth is down from a peak of 11% in April to 6% in June. Jobless claims are falling but at a slower pace, too. Payroll gains will continue but at a slower pace going forward.”

Jay Denton, chief analyst at ThinkWhy, says many of the issues holding back the job market should soon be resolved.

“Half of U.S. states will end additional unemployment benefits by July 10,” Denton wrote in the report. “While it is not the only factor delaying a faster return to pre-pandemic employment levels, it is having an impact. Early signs point toward declining unemployment totals where the additional $300 weekly payments end early.”

Also, Denton points out that many of the available jobs are in hotels and restaurants, where the pay is often equal or below that of full unemployment benefits.

“Given the rise in consumer demand, a boost in job gains is expected in this industry and particularly in states where the additional benefits are ending this summer,” Denton wrote.

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