The Bureau of Labor Statistics (BLS) released two reports this week showing that the labor market continues to be extremely strong. First, on Tuesday, they released data from the Job Openings and Labor Turnover Survey (JOLTS) from March 2022. The survey showed that job openings in the economy are at an all-time high of 11.5 million at the end of March. Along with this high demand for workers, the survey found that while total job separations were up slightly to 6.3 million, the number of quits within these separations was at a record high of 4.5 million. This implies that many workers are likely quitting their current jobs to move to better jobs. These two pieces of data point to a very strong labor market where the high demand for workers is creating a favorable environment for job seekers.
Second, the BLS released data on The Employment Situation from April today. This report provides information on the number of new jobs created by business establishments during April and also information on the employment situation gathered from households in the economy. The report found that the economy added 428,000 new jobs in April. Beyond this headline growth, the report contained small negative revisions of 36,000 and 3,000 fewer jobs created in February and March. Together, the economy has averaged over 523,000 new jobs over the past three months – continuing the trend of strong growth in the labor market.
On the household side, the unemployment rate remained unchanged at 3.6 percent with an estimated 5.9 million unemployed workers in the economy. Combining this data with the number of job openings from JOLTS, there are almost two job openings for every unemployed worker – making it challenging for firms to hire and easy for unemployed workers to find jobs. This ratio is plotted overtime on the employment page of the Clemson Economic Trends website. The plot shows that recovery from the pandemic has had increasing numbers of job openings to unemployed workers.
Given the extremely high number of job openings per unemployed worker, continued rapid growth in the number of jobs will require more workers to enter the labor force. Some data from the household survey suggests that the effects of the pandemic were declining in April, which may bode well for some workers to enter the labor force who were sidelined by the pandemic. For example, 1.7 million people report that they worked less during April due to pandemic-related disruptions down from 2.5 million people in March. Moreover, 586,000 people reported that they were prevented from looking for work due to the pandemic, which was down from 874,000 in March. As these numbers continue to improve it is likely that the labor force will be able to continue to grow.
Finally, the report includes information about wage growth, which is important to follow given ongoing concerns about inflation. The report found that wages grew by 5.5 percent from the year before, which is strong growth but not at the overall pace of inflation.
