The labor market may be cooling off, but not by much, according to new data on job openings and turnover.
Employers had 11.4 million vacancies in April, according to the Labor Department, down from a revised total of nearly 11.9 million the previous month, which was a record.
The April vacancies represented 7 percent of the entire employment base, and left nearly two available jobs for every person looking for work, reflecting continued high demand for labor even as the Federal Reserve begins to tamp it down.
The number of people who left their jobs was steady, at six million, also close to the highest number ever recorded, as was the number of people hired, at 6.6 million. The data, gathered on the last business day of April, was reported Wednesday in the Labor Department’s monthly Job Openings and Labor Turnover Survey, or JOLTS report.
Employment gaps remain largest in the services sector, where consumers have shifted more of their spending as pandemic restrictions have eased, but they are shrinking. The leisure and hospitality industry had a vacancy rate of 8.9 percent, for example, down from 9.7 percent in March.
The State of Jobs in the United States
The U.S. economy has regained more than 90 percent of the 22 million jobs lost at the height of pandemic in the spring of 2020.
The construction and manufacturing industries, however, had the greatest surge in openings. Both reached record highs, showing that demand for housing and goods hasn’t slowed enough to make a dent in available jobs.
Wages have escalated rapidly in recent months as employers have competed to fill positions, peaking in March at a 6 percent increase from a year earlier, according to a tracker published by the Federal Reserve Bank of Atlanta. Although not quite fast enough to keep up with inflation, growth has been stronger for hourly workers and those switching jobs. The millions of workers quitting each month tend to find new jobs that pay better, data shows.
Employers have struggled to bring workers back from the pandemic, which initially sent labor force participation down to levels not seen since the 1970s, before a wave of women entered the workplace. The economy remains more than a million jobs under its peak employment level in February 2020.
Steve Pemberton, chief human resources officer for the employee benefits platform Workhuman, said his firm’s clients gave out 50 percent more monetary awards to their employees in 2021 over the previous year in an effort to increase retention. But he doubts that work force participation will ever reach its prepandemic level given the options available outside traditional employment.
“You can’t gig your way to a living wage in some parts of the country,” Mr. Pemberton said. “But for the overwhelming majority of the work force, they might say, ‘Going back to being a full-time employee isn’t something I’m going to do; I’ve found a way to make a living with multiple jobs.’” (The JOLTS report does not capture those working as independent contractors.)
Layoffs declined to a low of 1.2 million, indicating that employers are hanging on to as many workers as they can. That number fits with new claims for unemployment insurance, although they’ve been rising since reaching a half-century low in March.
Over the weekend, Christopher J. Waller, a Federal Reserve governor, gave a speech explaining how he hoped interest rate increases would slow inflation: by shrinking the number of vacancies without putting too many people out of work.
“The unemployment rate will increase, but only somewhat because labor demand is still strong — just not as strong,” Mr. Waller said. “And because when the labor market is very tight, as it is now, vacancies generate relatively few hires.”
