Despite a decrease in the number of unemployed in the U.S., the jury may still be out as to the strength of the revival of the labor market.
The Bureau of Labor Statistics data released on 7 July shows that the number of job openings is little changed, with the number standing at 5.4 million on the last business day of May. The balance was maintained between separations, or those going off the payroll for whatever reason, and the number of hires. Hires were almost constant at 5.0 million and the same for separations which stood at 4.7 million for May.
The number of people who are quitting their jobs monthly is close to, but still lower than, the levels when the Great Recession started in 2008. The difference is in the number of job openings which fell dramatically during the recession as the numbers of unemployed grew.
The regular monthly increase in job opportunities is the one sign that the U.S. economy is on the move upwards, albeit at a slow pace.
The fact that there are a large number of job openings could be an indication that employers may be finding it difficult to fill open job spots at current wage levels.
Analysts at RDQ Economics wrote in a research note that, “Jobs continue to go unfilled at near record rates and in record numbers. High levels of job openings cast doubt on the ideas that there is a substantial hidden unemployment not captured in the unemployment rate.”
Companies will come to the realization that they will have to pay more in order to access a wider labor pool that has the necessary skills or is prepared to upgrade its skills level. This can become the start of a cycle in which higher paid employees become bigger spending consumers with a resultant increase in economic activity, finally resulting in an increase in the GDP numbers.
The limiting factor on a rapid increase in wage rates is the number of part-time or other workers who are not filling full time or permanent positions. These workers generally tend to earn less per hour and don't enjoy the same benefits as permanent employees.
The good news for the present is that the Labor Department figures show hiring is on the increase, having reached a monthly average of 245,000, up on the figure of 221,000 recorded a year earlier.