The Labor Market is Back to Normal

The Labor Market is Back to Normal

Today’s JOLTS report largely resolves the puzzling gap between job openings and online job postings

For months, BLS-reported job openings have exceeded their pre-pandemic level by around 40%, even as the number of unique active online job postings advertised across the U.S. has fallen all the way back to its pre-pandemic level. 

Today’s JOLTS report partially resolves the conundrum and confirms what we’ve been seeing in online job postings: the labor market is largely back to pre-pandemic conditions. Job openings experienced a large drop in July to 8.8 million, just 26% above their pre-pandemic level, and the quits rate fell all the way back to its pre-pandemic rate of 2.3%. 

Both declines point to cooling labor market conditions, which will come as a relief to many employers, but bring back many of the old challenges that have characterized job search for decades. 

Note that conditions do still favor job seekers and workers in some regard. With layoffs and discharges still 17% lower than before the pandemic, the so-called “labor leverage ratio”—a measure of job seeker and employee bargaining power—is still 29% higher, and there are still close to 3 million more job openings than unemployed job seekers. In other words, while it might take more time, more applications, and stronger job interview performances to land a job than it did in 2021 and 2022, there are still plenty of jobs going unfilled.