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Job Openings and Resignations Reached Record Highs

Annie Erling Gofus - May 25 2022
Published in: Global Workforce
The Labor Department reported that employers posted 11.5 million job openings in March

Job openings and the number of employees who quit reached new highs in March, as a lack of available labor continued to pressure the US employment market. The Labor Department reported a seasonally adjusted 11.5 million job openings in March, up from 11.3 million the previous month. In the same month, the number of people who quit their jobs reached 4.5 million, almost equal to the all-time high in November of last year. At the same time, employment growth dropped to 6.7 million hires in March from the previous month.

Through April, separate government and private-sector forecasts indicated that demand for labor was still robust. According to a report by the jobs site ZipRecruiter, there were about 11 million job openings in April.

According to the Labor Department, employers have created an average of more than 540,000 jobs a month for the past year. According to FactSet, the Labor Department is slated to issue a statement on Friday revealing that the economy created another 400,000 new jobs in April. That would be the first time since November 2002 that employment has topped 400,000 in a single month.

The economy and job market rebounded strongly from the brief but devastating coronavirus downturn in 2020. The comeback has been aided by massive government spending and ultra-low interest rates set by the Federal Reserve.

Companies were caught off guard by the abrupt resurgence in consumer demand and rushed to hire staff and fill their shelves. They were compelled to raise pay, and ports, factories, and freight yards became clogged with traffic, which resulted in shipping delays and higher prices.

Job openings in March were highest in the consumer-facing industries of accommodation and food services and the arts and entertainment sector. Job openings in the healthcare sector were also near record levels.

According to a ZipRecruiter study of Labor Department data, job postings at large businesses with more than 5,000 employees have increased by more than double in the last year. Manufacturing, retail, education, and professional services have seen the most significant increases, and in the South, openings reached their highest levels on record.

According to the Labor Department, the number of jobs available in March exceeded 11.4 million in December for the first time ever. There is little indication that the most competitive job market in history has ended. Businesses will continue to face rising wage inflation due to high turnover and an ever-widening gap between demand for labor and supply.

Job openings continue to exceed the number of unemployed individuals searching for employment. According to the Labor Department, there were almost two job opportunities for every unemployed person in March. Since the start of last spring, more jobs have been created than unemployed people seeking employment.

The good job openings and employee quit reports may be discussed at the Federal Reserve, which is anticipated to raise interest rates. According to Fed Chair Jerome H. Powell, the historically low unemployment rate is a major reason why the economy can withstand higher interest rates without sliding into recession.

Employers across the economy have had to raise salaries and improve benefits in response to this insatiable desire for fresh talent. Although employees have seen faster growth in pay (an increase of 4.7 percent), their income has not kept up with inflation, which has risen by 8.5 percent during the same period. According to experts, pay is expected to rise in the coming months as businesses compete for a shrinking number of individuals.

Employers have had difficulties finding qualified individuals from a small pool of available workers, and millions of people are expected to stay out of the workforce. As the talent pool shrinks, wages continue to increase for available workers.

Many people in the labor market are discovering that they have gained power, making it simpler to change jobs. The tight labor market has aided drive compensation rises to new heights, keeping pressure on prices. Employees who change jobs frequently receive double-digit pay raises.

The typical pay for workers who switched jobs rose by 5.3 percent from a year ago. According to the Wage Growth Tracker from the Federal Reserve Bank of Atlanta, wages for those who remained put increased by 4 percent during this period.

Many workers credit the robust job market with encouraging them to take chances that they may not have otherwise been willing to undertake. More and more professionals are choosing more flexible contracts and work-life balance.

In March, private-sector employees earned 5.6 percent more than in March 2015. According to the Labor Department, earnings increased at a pace that was four times as rapid as the approximately 3 percent rate seen during the previous year. If the job market were to deteriorate significantly, it's possible that we wouldn't see the same degree of wage growth and benefits expansion.