Job openings in the United States reached a record 10.9 million in July, continuing to show that the demand for workers remains strong while employers struggle to fill job vacancies.
The record high is a reflection of a tight labor market that has hampered businesses’ recovery from the pandemic.
New hires inched down to 6.7 million and job separations were little changed, at 5.8 million, according to Labor Department data released on Wednesday.
Job openings—a proxy for labor demand—have surpassed the unemployment level—a proxy for labor supply—since May, indicating a tight labor market that has hampered businesses’ recovery from the pandemic.
In particular, the largest increases in openings were in health care and social assistance, which were up by 294,000; finance and insurance, up by 116,000; and accommodation and food services, up by 115,000.
Unlike the tight labor market before the pandemic, when the unemployment rate was at a 50-year low of 3.5%, today’s labor shortages are being driven mainly by a mismatch between workers’ skills and employers’ needs, the lack of child care and concerns over COVID-19 risks at work.
While child care constraints would be expected to ease as the expanded child tax credit program—started in July—takes hold, we expect that the negative impact from the resurgence of the coronavirus since late July will continue to plague the job market. That impact was evident in the August payroll data released last week that showed 235,000 jobs added, well below estimates.
The record number of vacancies, on the other hand, opened more opportunities for workers to look for new jobs. The number of people quitting voluntarily increased to 3.98 million in July, approaching April’s record of 3.99 million.
Job quits increased in wholesale trade, rising by 34,000, and in state and local government education, up by 14,000.
Still, it is important not to overreact to the headline number for July. The economy has dramatically changed since July because of the shocks from the delta variant, the child tax credit program and the federal Pandemic Unemployment Assistance program, which ended on Sept. 6.
For more information on how the coronavirus pandemic is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.