By Manuel Gutierrez, Consulting Economist to NKBA
Key Takeaways:
- May’s 9.2 million slightly exceeds April’s total.
- Old record of 7.6 million openings in November 2018 is shattered by 21%.
- Professional Services and Health & Social Services account for 1 in 3 openings.
Want a job? Chances are, you’ll find one.
The number of job openings remains at an all-time high, rising by a negligible 16,000 in May (Figure 1).
Prior to the pandemic, the highest number of job openings recorded was 7.6 million in November 2018, but that high was obliterated by 21%. During 2019, the number of openings fell slightly and more people took jobs. But by the end of April 2020, openings plummeted by 2.5 million as a direct consequence of the forced shutdown of businesses nationwide.
The recovery in job openings began in earnest in January of this year, when it reached 7.1 million, equal to last year’s monthly average shown by the dashed gray line in Figure 1.
A third (32%) of May openings were concentrated in two sectors — Professional Services and Health & Social Services — (Figure 2), each accounting for 16% of the openings. The third largest sector is Hotels & Restaurants, with 14% of total open jobs, followed by Retail Trade at 11%. Note that three of the top four sectors are those that suffered the largest employment losses after last year’s economic shutdown.
Various Government agencies account for one in 10 openings. Within the government sector, though, the majority of job openings are at the state and local levels Although their detail is not displayed in Figure 2, they account for 86% of all government jobs currently open.
The right panel of Figure 2 shows changes in the number of job openings in May by sector. Many sectors had a reduction in the number of openings, highlighted by the red bars. This was either because the businesses have been able to find workers to fill those positions or potentially because they decided to eliminate those positions or closed down altogether.
May’s 9.2 million job openings shatters old record of 7.6 million from November 2018 by 21%.
It should be noted that several sectors that lost a large number of jobs last year posted more open positions in May. Such is the case for Hotels & Restaurants, which listed 89,000 more openings in May, and Health & Social Services, whose openings increased by 81,000 for the month.
Closer to the K&B industry, the number of jobs open in Construction fell by 52,000 in May, although the total accounts for just 3% of all openings.
Despite the 9.2 million jobs currently open, there is almost an equal number of people who are unemployed (Figure 3.)
That is likely due to a mismatch between qualifications needed for the open positions and the skills and abilities of the unemployed. It is also possible that the generous Federal government payment programs and unemployment subsidies have been discouraging some from seeking jobs.
On a regional basis, the South has the largest number of job openings — 38% of the total as of May. This percentage is line with the region’s population, 37% of the total U.S.
Job availabilities in other regions also align with its overall population.
Figure 4 displays the trend in job openings for the four U.S. regions. The chart reveals that over the last two decades, there has been a gradual shift in job openings away from the Northeast and the Midwest and toward the South and the West. This also aligns with population shifts.
Twenty years ago, in 2001, the Northeast generated 21.5% of all job openings. Today it accounts for 18%.
Similarly, the Midwest represented 23% of openings in 2001, but has slipped to 21.6% this year.
Losses from the Northeast and Midwest were captured by the other two regions, with the South benefitting the most. Its share of openings rose by 3.5 points, to 38.5% from 35%. The West grew by a more modest 1.4 points over that 20-year period, to 21.9% from 20.5%.
Charts:
