A Record Number Of Americans Just Quit Their Job, As Job Openings Surpass Unemployed Workers By A Record 2.8 Million
After seven consecutive months of massive increases in job openings (where even the weakest month saw a 290K increase and the strongest, July, saw a record 913K new jobs openings), today the BLS reported that in September the number of job openings in the US may have finally reached a peak, dropping for the second time in a row, by a modest 191K in September (recall the JOLTS report has an extra month delay vs the payrolls report), after August’s 469K drop. Still, even with the big drop, the total number of job openings remains a huge 10.438 million, which came in well above the 10.3 million expected, and just shy of the 11.1 million all time high.
The second consecutive decline in job openings took place in the month when millions of Americans lost their emergency pandemic benefits, and while we have yet to see a big surge in payrolls as a result of millions of unemployed workers collecting benefits returning to the workforce, we expect continued declines in job openings in the coming months as more and more vacant jobs are filled. But not just yet.
Looking at the details, job openings increased in health care and social assistance (+141,000); state and local government, excluding education (+114,000); wholesale trade (+51,000); and information (+51,000). Job openings decreased in state and local government education (-114,000); other services (-104,000); real estate and rental and leasing (-65,000); and educational services (-45,000). The number of job openings was little changed in all four regions
As a reminder, when looking at the JOLTS report two months ago, we pointed out that for the first time ever, there were over 2 million more vacant jobs than unemployed workers. Well, fast forward to today when despite the drop in job openings, with the number of unemployed workers dropping even more, there was now a new record, or 2.8 million, more vacant jobs than unemployed workers confirming that the US labor market remains painfully cracked.
Obviously, with far more job openings than unemployed workers, this meant that in August there were again less than 1 unemployed workers (0.7352 to be exact) for every job opening, up from 0.7841 in July, and down from a record 4.6 at the peak crisis moment last April.
Furthermore, in September in addition to a decline in job openings, we also saw a modest slowdown in hiring: according to the BLS, hiring dropped by 38K to 6.459 million following last month’s sharp decline in hiring of 264K, as decreased in state and local government education (-92,000) and educational services (-89,000) while increasing in health care and social assistance (+109,000) and finance and insurance (+60,000).
But perhaps the most interesting highlight of today’s JOLTS report was neither the openings nor the hiring activity, but rather the number of quits, which for the second month in a row soared to an all time high, jumping in September by 164K to a record 4.434 million. The quits rate increased to a series high of 3.0%, from 2.9%, as quits increased in several industries with the largest increases in arts, entertainment, and recreation (+56,000); other services (+47,000); and state and local government education (+30,000). Quits decreased in wholesale trade (-30,000). The number of quits increased in the West region
As a reminder, this “take this job and shove it” indicator is generally seen as a real-time proxy of how marketable employees think they are, as they tend to quit jobs and look for higher paying occupations when the job market is red hot. And since it tends to lag peaks in job openings modestly, the surge in quits was probably not all that surprising.