Demand for workers was still growing before the Delta variant impacted the US economy. Job openings once again hit a new all-time high and were 56% above their pre-pandemic level. There were noticeable increases in job openings for accommodation and food services, an indication that the reopening of that sector was going well in July. The big uncertainty is how much of a blow did the latest surge in the pandemic deal to demand.
The supply of jobless workers currently looking for a job was well outstripped by employer demand. In July there were 83 unemployed workers for every 100 job openings, a ratio last seen in December 2019. Unemployment did drop in August, so this ratio may have fallen further depending on what happens to job openings. Even if demand slows down or even falters, job seekers remain in a relatively favorable bargaining position.
July’s data suggests that the reopening of many service sector industries was continuing apace. But there were also solid increases in openings in sectors not as deeply affected by the pandemic such as professional and business services. While the Delta variant might hinder growth in industries like accommodation and food services, there is broad momentum across industries. In fact, job openings were above pre-pandemic levels in all industries.
The Delta variant has disrupted many plans and predictions, including the idea that the reopening of the service sector will continue to power the recovery. This may be a temporary slowdown, but we should remain vigilant about the risks to a quick and robust recovery.