Employers Added 430,000 Openings For Month
The latest Labor Department data, announced Wednesday, shows that in July, US employers were continuing to hire, with job openings reaching a record high of 430,000 for a seasonally-adjusted total of 5.8 million job openings. This was the highest number of openings since the Labor Department began tracking the data in December 2000 and moved the job openings rate to 3.9% in July after a stable 3.6% for the three previous months, Reuters notes. Despite this, hiring fell to 5.0 million in July from 5.2 million in June, or 3.5% from a 3.7% June rate. Job openings were particularly weighted towards the professional and business services, food services and accommodation, manufacturing, and retail sectors. Examining the data, Pantheon Macroeconomics chief economist Ian Shepherdson explained, “The data now signal unambiguously that the labor market is unable to supply the people companies need. Usually, that means wages will accelerate, though the evidence for that now is mixed.” Barclays economist Jesse Hurwitz further elaborated, “Combining these data with figures from the Labor Department’s employment report suggests that labor market slack continues to diminish. On balance, the data suggest labor demand held up solidly at the beginning of the third quarter.”
What Happens Next
Bloomberg News reports that the data “show employers were optimistic enough about the economic outlook to post more vacancies and compete for a dwindling pool of available workers as the jobless rate held at a seven-year low, which should eventually help push wages up.”
What This Means For Small Businesses
With the economy continuing to improve, small business owners are able to hire more workers. However, a tightening labor market presents concerns as small businesses may face increased difficulty in finding the right people for the jobs.
NFIB recently published its monthly jobs report, which echoed similar data about positive hiring trends in August among small businesses.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.