The Great Resignation continues — or does it and is it really something else?
Job openings are self-explanatory, but quits may require some explanation. Quits are voluntary and many consider this metric as a sign of labor market strength — people quit their jobs when they optimistic about their prospects for getting another job.
Obviously as the pandemic hit the employment market in April 2020 when job openings dried up, workers did not quit their jobs because there were no other jobs to go to. (It’s interesting to note that the number of job openings was fairly steady from around mid-2015 to mid-2017, but we digress.)
As employers fail to fill their job openings, the number of openings rise, which can easily be seen — and dramatically — starting in December 2020. Although the movement with the number of quits is not as sharp, the ratio between quits and openings is. Although the changes with one month of data do not necessary mean a new trend, it is interesting to note that in August 2021 (latest available data) as the number of quits continued to rise, the number of job openings declined along with the ratio between those two measurements. FYI, these data are from the U.S. Department of Labor / Bureau of Labor Statistics program JOLTS (Job Openings and Labor Turnover Survey); for the full news release of the data, go here.
Are employers giving up looking for workers to fill their openings, actually filled some of their job openings, have accelerated their automation / technology efforts to require fewer workers, or have workers who may have quit found more likeable / suitable employment? The reality is most likely a combination of these reasons, with a few more unstated.
When will job growth and people return to jobs according to so-called normal trends? “A long time ago in a galaxy far, far away” in our very first employment report of August 2006, we offered a clue of what “normal” job growth may realistically look like making reference to two seminal studies, the first published in the late 1980s and the follow-up ten years later. Six years later in October 2012, we again referred to those studies how shifting demographics was creating and will continue to cause a labor shortage.
The current pandemic pushed a lot of people out of the workforce — many of whom do not feel it is worth the personal capital to return to a workplace. In the immortal words of Pogo, “We have met the enemy and he is us.” Incidentally, that phrase was coined as an anti-pollution slogan for the first Earth Day in 1970. Guess we’ve come full circle. Mic drop.
October 2021 Employment Report
The unemployment rate continued to decline and was down 0.2 percent to 4.6 percent in October. The number of nonfarm jobs for the past several months was revised upward so August and September were not as weak as previously reported as the economy added 531,000 jobs in October. This often happens as the end of the year possibly as the statistical model apparently prepares for the annual revisions to the jobs data, which will occur early next year.
Average hourly wages were up 11 cents in October, which was a 0.4 percent increase; in the last 12 months, hourly wages are up 4.9 percent.
Temporary Help Services experienced a strong increase in October, but perhaps the more interesting development is that the declines of August and September were revised to increases.
Private sector employers added 604,000 jobs in October and that was a substantial improvement from the 365,000 increase in September and still better than the 504,000 added in August; however, a year ago in October 2020, the private sector added 954,000 jobs.
The private Goods-producing sector added 108,000 jobs in October after gaining 65,000 in September and 54,000 in August.
Manufacturing continued to improve, and at a faster pace, with an increase of 60,000 in October after gaining 31,000 in September and 49,000 the month before in August.
The Construction sector growth was able to fill 44,000 more jobs in October after adding 30,000 in September but declining by only 1,000 in August.
Mining and logging continued to be stable with the addition of 4,000 jobs in October as well as that same amount in September after adding 6,000 in August.
The private Service-providing sector added 496,000 jobs in October after adding 300,000 in September and 450,000 in August; a year ago in October 2020, it was up 847,000 jobs.
The Retail trade sector continued to add to its inventory of jobs, but at a slower pace with an increase of 35,300 in October after adding 57,300 in September but only 22,200 in August; a year ago in October 2020, this sector increased 106,500.
Apparently defying supply shortfalls, the Wholesale trade sector increased 13,500 in October after adding 7,300 in September but after cutting 5,200 jobs in August; a year ago in October 2020, it was up 9,200.
Transportation and warehousing continued to add jobs with an increase of 54,400 in October that was not too far off the gain of 57,400 in September but further off the 67,300 increase of August; a year ago in October 2020 ,it was up 71,300.
Financial activities seemed to regain some of its mojo with an increase of 21,000 in October after adding only 7,000 in September; a year ago in October 2020, it was up 34,000.
The Professional and business services sector added an even 100,000 in October that followed a gain of 76,000 in September and an increase of 139,000 in August; a year ago in October 2020, it was up 241,000. Computer systems design and related services computed in 7,000 more jobs in October after adding 10,900 in September. Management and technical consulting services added 13,600 in October that followed an increase of 11,900 in September. Architectural and engineering services gained only 1,800 jobs in October, which followed a 12,700 increase in September.
The entire private Education and health services sector was up 64,000 in October after adding only 13,000 in September. Home health care services was up 15,800 in October that followed an increase of 10,800 in September.
The entire Leisure and hospitality sector was up 164,000 in October after adding 88,000 in September.
The total number of Government jobs declined by 73,000. The Federal government was down 3,000 in October. State government declined by a total of 25,000 with most, but not all, of that decline in state education while local government declined a total of 45,000 jobs that experienced a similar trend.
Temporary Help Services Roundup
The big development is that the Temporary Help Services numbers, which were previously reported as declines for August and September were revised to increases and October was a good month as well. In October, THS added 41,100 jobs on top of the 6,100 increase in September and 27,400 it added in August. This brings the October number of temporary help services jobs to 2,771,500, which was a 1.5 percent sequential increase and up 10.0 percent from October 2020.
For a chart of THS jobs compared to all nonfarm jobs, click here.
In October 2021, temporary help services market share, which is its portion of all jobs, was 1.8686 percent up from 1.8475 the previous month. A year ago in October 2020 it was 1.7675 percent but two years ago in October 2019 it was 1.9447 percent.
The unemployment rate dropped 0.2 percent to 4.6 percent in October.
The labor force grew by only 104,000 while there were 359,000 more employed persons, and 255,000 fewer unemployed persons. However, the workforce participation rate was unchanged at 61.6 percent but the employment-population ratio ticked up 0.1 to 58.8. Those considered as not in the labor force increased by only 38,000. So, with a relatively small increase in the size of the labor force and larger movement in the number of employed as well as unemployed persons, the unemployment rate declined.