The United States now has more jobs than ever in history
June job vacancies hit a record high as a more dramatic reminder of how the pandemic has fundamentally distorted the labor market, according to the latest monthly data from the Labor Statistics Department’s Jobs and Labor Turnover Summary. The number has surged to 10.1 million. As the economy recovers, companies are struggling to add staff, despite the spread of delta variants of the coronavirus in under-vaccinated areas of the United States.
Mark Hamrick, Chief Financial Analyst at Bankrate, said:
“The economy is reopening. Unfortunately, with so many businesses open, supply and demand imbalances have caused demand to explode, but it will take time for supply to catch up. “Sam Stovall, Chief Investment Strategist at CFRA Research, said.
The past 9.3 million employment record was set in April, just two months ago, and the June figure far exceeded the average economist estimate of 9.1 million surveyed by Dow Jones.
The number of people who quit their jobs as economists used as a kind of agent to measure worker confidence increased to 3.9 million in June, approaching the 4 million record set in April. rice field. Hiring increased from 5.9 million last month to 6.7 million. Worker demand was highest among employers in the business and professional services, retail and hospitality (restaurant and accommodation) businesses. Regionally, the South is the most active, with an increase in both the number of jobs and the number of people quitting.
Layoffs, on the other hand, hit a record low of 1.3 million. “It tells us that the people who accept the job are sticking to the job. More and more companies may be raising salaries to attract and retain employees. If people are making better wages, living wages, they are more likely to stick to it, “Stoval said.
Economists and market strategists characterize data as a dichotomy between somewhat good news and bad news. Employee demand is pushing up wages, especially for low-income workers, and the backlog of positions suggests strong demand for both goods and services, which can sustain a continued recovery in the labor market. can make it, right. BLS said on Friday that there are still 9.2 million people in the Ministry of Labor’s “U-6” category. This includes unemployed people, part-time workers who want a full-time job, and people from the Ministry of Labor. It is characterized by being “slightly obsessed” with the workforce. This is a broader measure of the unemployment rate under the headline, which many economists consider to be a better measure of labor market strength.
The downside of this surge in worker demand is the same rise in wages, which has hit companies already struggling with high input costs. While some specific niches (used cars are one prominent example) have recently shocked consumers with stickers, economists are pushing prices up. Inflationary pressures are primarily scrambled supply chains and businesses. Says it is caused by a lack of key components that increase the cost of the car.
“Recently, we know that the biggest stimulus for inflation is related to supply constraints,” Hamrick said, but these cost pressures may be eased for some companies. He added that he couldn’t. “I see some dominoes falling … petrol may have peaked, we’ve already turned that corner with lumber.”
Economists, on the other hand, believe that they have not yet fully seen the impact of rising wages on prices. Aoifinn Devitt, Chief Investment Officer of investment adviser Moneta, said: “As for the upward pressure on wages … it hasn’t peaked yet,” she predicted. “I think it’s pretty close to the peak.”
The hurdles to fully reopening school for face-to-face learning can jeopardize the return of businesses under pressure to fill their jobs.
“Recent data suggest that there is much less labor slack than the unemployment rate suggests. If the labor shortage continues, wages are ready to rise further and more. Government spending will act as an additional booster, “said Joseph Flavorguna, managing director and chief economist of the Americas in Natixis, in a study. Note.. “It looks like a further recovery in the labor market is imminent, but it can be accompanied by an upward inflation risk,” he said.
Some people think this is already happening. Infrastructure Capital Management’s portfolio manager Jay Hatfield suggests that accommodative monetary policy and trillions of fiscal stimulus measures have already overheated the economy, with more than 10 million jobs at the end of June as evidence. did. “Job vacancies are also exacerbated by supplemental pandemic unemployment programs that discourage people from returning to work,” he said.
This is an issue between labor economists and policy makers, with some arguing that lack of childcare and fear of the coronavirus are more influential factors than keeping workers on the sidelines.
“For many, I think the problem is not finding the right childcare. Perhaps next month’s reopening of school will alleviate many of those concerns,” Stova said.
Optimistically, this could jeopardize the return of businesses under pressure to fill their jobs to normal, with the hurdles of fully resuming school for face-to-face learning. He added that it suggests. As always, the coronavirus is still the largest X factor. “If the delta variant raises more concerns from school systems and parents, I think it will take some time for the supply demand curve to reach equilibrium,” he said.
Apart from keeping workers out of the loop longer, the resurrected virus can have a spillover effect that distorts labor demand, said Nick Banker, Indeed.com economist. “Slow returns to face-to-face offices can slow down the progress of attendant work in some downtown business districts,” he said.
“There are short-term concerns about delta variants. I think this wave of virus can weigh heavily on both labor supply and demand,” Banker said. “Going to a restaurant, going to a large social gathering, [patronize] Another kind of business with lots of people together, “he said.