Giant Gap Persists Between Job Openings and Available Workers

“That’s the lowest ratio of unemployed people to job openings we’ve ever seen and that is contributing to unprecedented tightness in the labor market,” said Julia Pollak, chief economist for ZipRecruiter.

There were 11 million job openings at the end of October, the Labor Department said Wednesday in its own survey of openings and turnover in the labor market. These government figures lag behind the more closely watched monthly jobs report and private-sector data by about a month.

The rate at which people are quitting jobs has also been at record levels in recent months. Wednesday’s report showed a slight decline in that rate, to 2.8% from 3%, and the number of jobs that Americans quit in October dipped to 4.2 million from 4.4 million, which was a record high. Both figures are still significantly higher than pre-pandemic rates.

The share of the working-age population that is either employed or seeking employment, known as the labor-force participation rate, rose slightly last month, but not enough to keep employers from having to compete for workers. The November labor-force participation rate was 61.8%, still below the 63.4% rate in January 2020 ahead of the pandemic. The unemployment rate dropped to 4.2% last month, from 4.6%, as more people entered the workforce.

The shift in labor participation came as improved employment opportunities, waning Covid-19 worries and lower levels of government support drew people into the labor force last month, economists say. Savings built up during the height of the pandemic may also be dwindling, leading people to again seek work, they add.

In October, there were 67 unemployed job seekers for every 100 open positions. That ratio is the highest since the gap started to widen this summer, when the unemployment rate began dropping sharply. Both the unemployed and workers looking for better jobs have used that to their advantage, with pay rising sharply in lower-wage industries like leisure and hospitality and logistics.

“As businesses remain desperate for workers but workers themselves remain hesitant to stay in the labor market, or return to the labor market having left at some point during the crisis, the cost of labor continues to rise,” said Lindsey Piegza, chief economist for Stifel Financial.

The Omicron variant of Covid-19 is a looming threat and could affect the jobs market if it causes a deterioration in public health conditions and leads workers to leave the labor force or further delay their return.

The rate at which Americans were quitting jobs in October is expected to remain near recent record highs, with workers leaving jobs more than four million times each month.

Workers are quitting jobs for higher wages in other positions, more flexibility in working conditions and better benefits. Quits are particularly high in sectors with faster wage growth, such as leisure and hospitality and transportation and logistics jobs.

“Low-wage sectors are clearly having trouble attracting workers,” Dean Baker, senior economist for the Center for Economic and Policy Research, said in an analysis of last week’s jobs report.

With the imbalances in the labor market persisting and favoring workers, the quits rate could rise even further in the coming months.

“They may be even more eager to start something new on Jan. 1,” Ms. Pollak said. “One of the most popular New Year’s resolutions is ‘get a new job.’”

Write to Gabriel T. Rubin at [email protected]