Demand for labor showed little change in September as job openings stayed at 10.4 million and the rate of people quitting their jobs reached an all-time high at 3.0%, according to new data on Friday from the Bureau of Labor Statistics.
The imbalance of the labor market has spurred firms to raise wages as they struggle to attract and retain workers.
The imbalance of the labor market, where demand for labor continued to outstrip supply, has spurred firms to raise wages as they struggle to attract and retain workers.
The gap between the pool of unemployed workers—a proxy for labor supply—and job openings in September remained significant at 2.8 million.
On the other hand, such a gap between demand and supply offered workers an opportunity to improve their careers as they switched to better-compensated jobs with better-matched employers, pushing the quit rate to the record of 3.0% from 2.9% in August.
That gap seems hard to fill in the coming months as the new hiring rate remained stagnant at 4.4% on the month. The figure for August was also 4.4%, while it was 4.6% in July.
The battle for workers continued to be in big firms’ favor as most of the monthly changes in job quits came from firms with 50 to 249 employees. These firms had 103,000 more quits in September compared to the previous month.
Firms with 250 to 999 employees posted a net increase of 33,000 quits, while larger firms with more than 1,000 employees had an increase of only 25,000 quits in September.
The takeaway
The labor market continued to be a seller’s market that benefited workers, and we expect that such a scenario will remain well into next year as demand for labor remains strong.
While many constraints on labor supply will ease in the coming months as concerns over COVID-19 and child care ease, there are reasons to expect that workers will not come back as fast as originally thought because of the persistent impact from early retirees whose return to the labor force remain a big question mark.
