The number of vacant positions in the U.S. labor market climbed to an all-time high in July, according to a report published Wednesday by the Bureau of Labor Statistics.
American employers were looking to fill nearly 5.9 million open jobs that month – a notable gain from June’s 5.6 million vacancies. The month of July over the last few years has shaped up to be a strong one for openings, as July 2015’s tally of 5.79 million vacancies held the previous record.
Openings were spread widely across sectors, with typically well-paying professional and business services employers and health care outfits looking to recruit 1.27 million and 962,000 new workers, respectively. Retail trade and leisure and hospitality companies, meanwhile, were looking to fill 627,000 and 763,000 positions, respectively.
“The strength of the consumer over the past year is evident in the industry breakdown of job openings,” Sam Bullard, managing director and senior economist at Wells Fargo Securities, wrote in a research note Sunday, highlighting the retail sector’s recent “jump in vacancies” and leisure and hospitality’s steady progress over the year.
Indeed, there’s been a substantial uptick in jobs related to consumption and personal finance over the course of the last year, suggesting Americans’ spending habits and salaries are mostly headed in the right direction.
Consumer strength is also evident in actual hiring, which climbed to its highest level since March. Employers brought on more than 5.2 million new workers in July – 20 percent of whom took up jobs in leisure and hospitality. Nearly 22 percent of July hires were in the professional and business services industries.
It’s encouraging to see hiring and openings in lower-wage, consumption-dependent sectors like retail and leisure, but it’s also good to see traditional business operations recruiting at a healthy clip. The ongoing recovery has played out over the last seven years, which is a historically long time for employment expansion. The fact that companies are still bringing on millions of new workers each month – and posting a record-setting number of want ads – is undoubtedly a good sign for the labor market.
It’s also good to see the number of domestic layoffs plummet to multiyear lows. U.S. employers slashed less than 1.6 million positions in July, which brings the month’s total to the lowest seen since November 2013. Interestingly, the types of jobs that have seen the most action in terms of hiring and recruiting – namely, those in retail trade, leisure and professional and business services – also saw some of the most layoffs.
That payroll retention momentum is widely expected to continue into August and beyond, as a separate report published last week by Challenger, Gray & Christmas estimated last month’s layoff announcements had plummeted to their second-lowest levels of the year. Planned layoffs were down 29 percent over the month and 22 percent over the year. To date, layoffs are down 10 percent from where they clocked in between January and August 2015.
But the layoff reductions haven’t been enjoyed across all sectors. Energy outfits have slashed 36 percent more positions this year than they did the year prior, and computer companies have increased layoff announcements by 111 percent.
“Since January of last year, there has been a string of large-scale job cuts from major players in the technology sector, including Hewlett Packard, Intel, Dell, Microsoft and, now, Cisco,” company CEO John Challenger said in a statement accompanying the report. “The surge in cuts does not necessarily signal weakness in the sector, but it certainly signals a shift.”
Overall, though, layoffs are in a pretty good place at this point in the business cycle, as employers appear more prone to bring on new workers than to get rid of existing staffers. And with openings at record highs and hiring maintaining a comfortable pace of growth, the labor market is still coming in hot as the summer months fade away.
Soergel, A. (2016, September 07). U.S. Job Openings Hit All-Time High as Layoffs Drop to 3-Year Low. Retrieved from http://www.usnews.com/news/articles/2016-09-07/us-job-openings-hit-all-time-high-as-layoffs-drop-to-3-year-low