Today’s Job Openings and Labor Turnover Survey (JOLTS) reports a promising pickup in both job openings and hires in February 2021, a sign that the recovery is finally moving ahead. The increase in hires was notable in accommodation and food services, but decreases in state and local government education are particularly troubling (though we know from March jobs data that state and local government hiring began to pick up in March). Overall, hires remain below its level before the recession hit, but job openings have now edged above its pre-recession levels. Once public health experts indicate it is safe to reopen and the American Rescue Plan (which was passed after today’s JOLTS data were collected) takes effect, I’m confident those openings will grow and translate into hires. Layoffs have held steady over the last couple of months.
One of the most striking indicators from today’s report from the Bureau of Labor Statistics (BLS) is the job seekers ratio—the ratio of unemployed workers (averaged for mid-February and mid-March) to job openings (at the end of February). On average, there were 9.8 million unemployed workers compared with only 7.4 million job openings. This translates into a job seekers ratio of about 1.3 unemployed workers to every job opening. Put another way, for every 13 workers who were officially counted as unemployed, there were only available jobs for 10 of them. That means, no matter what they did, there were no jobs for 2.5 million unemployed workers.
As with job losses, workers in certain industries are facing a steeper uphill battle. In the construction industry as well as arts, entertainment, and recreation, there were more than three unemployed workers per job opening. In educational services, accommodation and food services, other services, and transportation and utilities, there were more than two unemployed workers per job opening. As bad as these numbers are, they miss the fact that many more weren’t counted among the unemployed: The economic pain remains widespread with 23.6 million workers hurt by the coronavirus downturn.
On the whole, the U.S. economy is seeing a significantly slower hiring pace than we experienced in May or June. While the pickup in job openings is a promising sign, hiring in February was below where it was before the recession. There was an increase in jobs in the mid-March employment report, but we still have a long way to go before recovering the large job shortfall—11.0 million when using a reasonable counterfactual of job growth if the recession hadn’t occurred—that remains.