American companies added 600,000 open positions in March alone, with 1.4 million since December, bringing total job openings to 8.1 million.
By Manuel Gutierrez, Consulting Economist to NKBA
U.S. workers are facing what would normally be considered a very desirable situation: an ever-increasing number of job openings. The problem, however, is that businesses are unable to fill a number of those openings with workers capable and willing to work.
In March, the number of job openings rose to 8.12 million — nearly 600,000 more than the previous month. Figure 1 shows that these openings have increased steadily each month since December. At that time there were 6.7 million jobs available.
The current number of open jobs is the largest since December 2000, when the Bureau of Labor Statistics began to collect this data.
In December, employers opened 1.4 million new jobs, the bulk of which are within industries that require face-to-face interaction.
Such data suggests a strengthening economy, which is a welcome change from some other recent economic releases. Businesses are either experiencing strong current demand or expect demand to pick up in the near future.
Interestingly, the number of people who quit their jobs has also increased recently. Some 3.5 million workers left their jobs in March. This is the highest number since February 2020. Normally, people quit a job because they have found a new opportunity or expect to find one shortly without much trouble.
Job openings continue to be concentrated in industries that were most impacted by the pandemic. As more states and the CDC relax their rules related to human contact, those businesses that require continuous human interaction have improved the most.
The largest change in the number of openings from February to March is Leisure & Hospitality. This industry added 267,000 openings, accounting for 17% of all job opportunities (Figure 2.)
The second largest category is Hotels & Restaurants, with 185,000 availabilities added in March.
These two industries were most heavily impacted by the pandemic shutdown last year and still have the most ground to recover to reach pre-COVID-19 employment levels.
The third largest number of job openings is in Government, which added 175,000 in March. Details are not available as to the breakout by federal, state and local positions.
Although the number of openings stands at record levels, there are still more people unemployed than there are jobs available.
Figure 3 shows that there are still 1.6 million more persons unemployed than the number of openings available (bottom panel). The number of unemployed fell to 9.71 million in March, an impressive recovery from the 23.1 million who had lost their jobs last April.
Normally there are more people seeking employment than jobs available, but between 2018 and early 2020, the U.S. economy found itself in the highly unusual situation where that situation was reversed. The pandemic changed that dramatically and quickly, but as more people become vaccinated and the virus spread continues to weaken, the situation should continue to improve.
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