The economy continues to boom according to the findings in the Labor Department’s latest Job Openings and Labor Turnover report released Tuesday.
As the number of jobs continues to climb, the lower the unemployment rate is. The unemployment rate is at a 17-year-low.
“The number of available jobs in the U.S. rose by about 117,000 to a seasonally adjusted 6.94 million in July, the Labor Department said Tuesday. That is the highest level on records back to 2000, exceeding the prior peak set in April. It also exceeds the 6.28 million Americans who were unemployed during the month, meaning they were without work but actively seeking a job,” writes the Wall Street Journal.
With a strong labor market, the power shifts to employees.
In July, 3.58 million left their jobs, which was a new record.
“The supply of workers is very limited and the demand for labor is expanding,” said Becky Frankiewicz, president of staffing firm ManpowerGroup North America. “Employers have to be more open to let people in they might not have before.”
Wages are expected to climb as more employees make career jumps.
“The tight labor market is quickly causing workers to gain the confidence they need to quit their jobs,” said Jesse Edgerton, JPMorgan Chase economist. “That movement should lead to better wage growth.”
“Wage growth, which has been a major laggard of the ongoing economic recovery, was more impressive than forecast. Average hourly earnings increased by 0.4% month-on-month. And at 2.9% year-on-year growth, wages increased at their fastest pace since June 2009,” writes Business Insider.
This also means that employers are going to improve benefits and bonuses in hopes of attracting new talent and to retain current staff.
This is especially good news for less-educated Americans because they are getting hired in positions they may not have been hired for in the past.
But for employers finding qualified workers is becoming more of an issue.
“Jobs are plentiful today … that’s not the problem,” said Jim Baird, the chief investment officer of Plante Moran Financial Advisors. “Increasingly, the challenge is one for employers trying to find workers, particularly those with the skill set to fit their needs.”
Another hurdle has been to improve the labor force participation rate that has continued to decrease since the 2008 financial crisis. With the booming economy of today, will it return to its 2000 peak? Economists don’t think so, but this rate should still climb.
“Economists are divided on how much of the recent drop in the LFPR was due to the recession. Estimates range from 30 percent to 50 percent to as much as 90 percent. Even the most conservative estimate says that the recession forced nearly a third of workers out of the labor force,” writes The Balance. “According to the Federal Reserve Bank of Atlanta, half of the decline is due to the aging of America. These demographic changes affected the labor force even before the recession. As baby boomers reach retirement age, they leave the labor force. They don’t need a job. Others stay home to care for ailing parents or spouses or claim disability themselves. Since they represent such a large percentage of the population, they will have a major impact on the labor force participation rate. It’s a big reason why it may never regain its past levels, no matter how strong the job market is.”
But since there are more jobs than workers now, this may push the formerly long-term unemployees to return to the workforce.
While some may never return to work again, the job market is still primed for those looking for a job. 38 percent of small-business owners said they had unfilled job openings in August, according to the National Federation of Independent Business’s survey.
Author’s note: The economy is in a great place, but this means there is a tight labor market. It won’t be as easy for employers to fill positions, but anyone who really wants a job should be able to get one. The labor force participation rate, which sank dramatically under Obama, should also start to improve.