Workers are still very much in demand. Despite concerns about an imminent recession, employers are still looking to hire at near-historic rates and are desperately holding on to the workers they have, according to the latest federal Job Openings and Labor Turnover Survey (JOLTS) report. Quits remain elevated with workers taking advantage of the high levels of demand by switching jobs. Employees have strong job security and confidence in their ability to find new work. The labor market is still very much a job seeker’s market. Something dramatic will have to happen for this to change anytime soon.
The US labor market is so hot right now due to the combination of historic levels of demand for workers and low levels of joblessness. As of March, there were 1.9 job openings for every unemployed person. Back in February 2020, that ratio was only 1.2. To get back to that pre-pandemic ratio, openings would have to fall by roughly 38% to 7.1 million. A gradual cool down in the labor market could be possible, but not feasible in the short term. These 4.4 million openings are a tremendous amount of openings that would have to be filled or taken down by employers relatively quickly.
Workers continue to take advantage of the tight labor market. The private sector quits rate moved up to 3.3%, just under its all-time high set back in November. Similarly, the layoff rate remains quite low, just shy of its historic low. While both of these rates indicate a hot labor market, they haven’t moved steadily like they did last year. The temperature of the labor market is hot, but the temperature isn’t rising.
Job seekers have many advantages right now. Demand for their services are high and they can use these opportunities to secure high wages, more hours, and more advantageous working conditions. Unless demand starts to drop dramatically, this situation seems likely to endure.