State of the Labor Market

Another Strong JOLTS Report Shows the Balance of Power Is Tilting Toward Job Seekers

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Looking for a new job? You may have more bargaining power in your upcoming job hunt than you might expect.

The latest data from the Job Openings and Labor Turnover Survey shows employers are still geared up to hire as they posted 7.1 million job openings. With fewer unemployed workers to hire, they are starting to compete for workers and look at job seekers they may not have considered in the past.

Open jobs outnumbered officially unemployed workers for the sixth straight month in August. The ratio of the unemployed to the vacant jobs was 0.87, the lowest that ratio has ever gotten in the JOLTS data (see chart above). Historical data show that the last time the ratio was this low was 1969.

This ratio is low across industries as well. Eight out of 12 major industries have ratios below 1 and many of them have had such low ratios for quite some time. For example, the ratio has been 1 for education and health services since the beginning of 2015.

While the ranks of the unemployed have diminished quite a bit, workers already with jobs are also looking for work. The quits rate was strong at 2.4% in August, a sign that employers are looking to hire already employed workers. We didn’t see a tick up in quitting as we did last month, but the level is still quite strong compared to what we’ve seen in the recent past.

Employers are still looking to hire and are starting to compete amongst themselves for job seekers. The balance of power in the hiring process is definitely tilting toward job seekers. And while the labor market might not have hit full employment yet, it’s hard not to like where we are right now.

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