This Calculated Risk graph for the Labor Department’s Job Openings and Labor Turnover Survey says (almost) all of it. The yellow line signifying job openings is still soaring far above hires (blue line); so much so that there were still 1.2 million job openings left unfilled in July, the last month surveyed.
Yes, the U.S. economy is so big that there were 5.95 million hires, an increase of 237,000 jobs, and 5.8 million separations that were for a variety of reasons. Many of the separations were voluntary because those employees probably found better jobs.
It’s important to note that the blue columns in the graph show that Quits, or the number of voluntary separations, have been rising since 2010 and are at post-recession highs. Quits are up 3 percent in just the last 12 months.
So we are seeing a very strong job market with that substantial gap between 7.2 million job openings and 5.8 million hires. Hires are still increasing in this 11th year of the recovery from the 2017-19 Great Recession. I.e., there are no signs of weakness in hires that is usually a first sign of contraction.
Another jobs indicator, the NFIB Small Business Optimism Index, fell 1.6 points to 103.1, remaining within the top 15 percent of readings, per Calculated Risk, which is important because small businesses create some 80 percent of new jobs.
However, the NFIB reported job creation picked up in August, with an average addition of 0.19 workers per firm compared to 0.12 in July. Finding qualified workers is becoming more and more difficult with a record 27 percent reporting finding qualified workers as their number one problem (up 1 point).
But, “If the widely discussed slowdown occurs, a significant contributor will be the unavailability of labor–hard to call that a “recession” when job openings still exceed job searchers,” said the NFIB.
A further caveat to continued job growth was the Challenger, Gray & Christmas staffing report, which said U.S.-based employers ramped up the pace of downsizing in August, as companies announced plans to cut 53,480 jobs from their payrolls. This is up 37.7 percent from July’s total of 38,845, according to the latest report on job cuts released Thursday.
“Employers are beginning to feel the effects of the trade war and imposed tariffs by the U.S. and China. In fact, trade difficulties were cited as the reason for over 10,000 job cuts in August,” said Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc.
July was a good month for job formation, in other words, as well as the August unemployment report that showed 130,000 new payroll jobs. However, optimism is slipping among the small business owners that are saying they don’t expect better business conditions and real sales volumes in the coming months.
Harlan Green © 2019
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