JOLTS Report: Labor Market Now Slacker Than Before Pandemic
JOLTS Report: Labor Market Now Slacker Than Before Pandemic
The labor market is now slacker and slower than before the pandemic, and the pace of hiring is the slowest it has been since 2014, outside of the brief pandemic recession. As of today’s JOLTS report, there are just 1.20 job openings per unemployed person, down from a peak of 2.02 in March 2022, and below the pre-pandemic February 2020 average of 1.22. The hires rate has slowed to just 3.4%, down from 4.6% in late 2021 and 3.9% before the pandemic.
Over the past year, the number of job openings has slid by almost 1 million, the number of monthly hires has fallen by over half a million, and the number of monthly quits has fallen by over 400,000. The labor market has slowed down substantially under the weight of higher interest rates, which are holding back business investment and standing in the way of expansion.
Despite the broad-based slowdown, job openings in state and local government hit an all-time high of 988K, particularly driven by an increase in openings outside of public schools. They are 43% higher than the pre-pandemic February 2020 level.
The reason is twofold. Local governments are hiring aggressively, now that the private sector has slowed and filling vacancies has become easier. They are also staffing up because it’s an election year and the cost of poor service delivery can be accountability at the ballot box. For example, police hiring tends to rise substantially in election years, when much of the electorate is focused on safety and security.
Healthcare, another sector that is relatively insulated from the effects of higher interest rates, remains another area of strength in the economy, with over 40% more job openings than before the pandemic, and 13% monthly hires. Payroll employment in government, and in healthcare and social assistance, has grown 3.7% over the past year, while growth in all other sectors has slowed to less than 0.9% year-over-year. Strength in government and healthcare hiring is boosting aggregate labor market numbers and masking the weakness that businesses and job seekers are feeling in other parts of the economy.
Take a tour through the rest of the JOLTS report in ZipRecruiter charts.
