Labor demand keeps getting stronger. This is the third straight month of record-breaking job openings, according to the federal June Job Openings and Labor Turnover Survey (JOLTS), out today. The quits rate is also close to its all-time high, which was set just two months ago in April. This wave of demand will eventually recede, but job seekers should ride it until then.
With 10.1 million job openings, employers’ demand for workers is incredibly strong. But at the same time, labor supply is, at least for now, not that abundant. The result is a labor market where there is roughly one unemployed worker per job opening. Whether this level of tightness will continue depends on whether demand can stay this high and how quickly workers will return to the labor force.
The June data also show the situation employers in reopening industries are dealing with. Hiring in leisure and hospitality has become much more difficult in recent months, as the average number of hires per job opening has dropped. This sector now has seen the second-largest decline in the number of hires per opening compared to pre-pandemic levels. Employers are also having a harder time holding onto the workers they have, with leisure and hospitality seeing the largest increase in its quits rate.
The reopening of the broader economy has resulted in unprecedented levels of demand for workers. Job seekers, both jobless and employed, are taking advantage of this situation with job switching near historic levels and nominal wages growing quickly. The question now is by how much and how quickly will this situation fade.