Record job offers in the United States and growth prospects for wages

WASHINGTON (Reuters) – Jobs in the US hit a record high in July, and more and more Americans have quit their jobs, highlighting the strength of the job market and confidence that could accelerate the growth of jobs. wages.

The monthly Job Openings and Revenue Department (JOLTS) survey released Tuesday also suggested a further tightening of labor market conditions, as employers seem to be finding it increasingly difficult to find skilled workers.

While tightening labor markets could spur wage gains, some economists have warned that worker shortages could have a negative impact on economic growth. The JOLTS report reinforced expectations that the Federal Reserve will raise interest rates at its September 25-26 meeting. The Fed has raised rates twice this year.

"Economic expansion is colliding with the lack of workers to run the workshops, work in restaurants and shopping center stores across America," said Chris Rupkey, chief economist of MUFG in New York. "No workers, no growth, it's as simple as that."

Job openings, a measure of labor demand, increased by 117,000 to 6.9 million euros in July. This was the highest level since the start of the series in December 2000. The job creation rate was 4.4%, unchanged from the previous month and a record high for the first time in April.

The current level of job openings means that there is work for every one of the 6.2 million unemployed people in August. Hiring was little changed in July, to 5.7 million, keeping the hiring rate at 3.8% for the second month in a row.

The finance and insurance sector had 46,000 job vacancies in July. The manufacturing of non-durable goods had 32,000 vacancies. The rate of job openings in the manufacturing industry as a whole reached a record level of 3.8% in July, compared with 3.6% in June.

But job offers in the retail sector declined by 85,000. In July, vacancies in education and the federal government also declined.

WORKER SHORTAGES

The labor shortage was also corroborated by a survey of small businesses released Tuesday. The NFIB survey found that employment opportunities in small firms had peaked in 45 years in August. A record number of companies said they could not find skilled workers to fill the vacancies.

According to the NFIB, job openings were mainly in construction, manufacturing and wholesale trade. There was also a shortage of truckers.

"Looming shortages of skilled workers could hurt business expansion plans in the coming months," said Dante DeAntonio, an economist at Moody's Analytics in West Chester, Pennsylvania. "In the meantime, the growing tightening of the labor market is driving more workers back into the labor market and leaving their jobs in search of better opportunities."

Shortages of workers, especially for truckers, are already contributing to bottlenecks in the supply chain, which could slow down the dynamic economy. The economy grew at an annualized rate of 4.2% in the second quarter, almost double the pace of 2.2% between January and March.

Growth is expected to reach 3% this year.

The Labor Department's JOLTS report also showed that the strength of the labor market gives Americans the confidence to leave jobs for other jobs. The quit rate reached 2.4% in July, its highest level since April 2001, after 2.3% in June. Fed officials view the quit rate as a measure of confidence in the labor market.

The increase in job mobility confirms economists' optimism that job growth could be faster. Last week, the government announced a sharp rise in wages in August, with average hourly earnings increasing 2.9%, the largest increase since June 2009, after 2.7% in July.

Wage gains remained largely moderate, even though the unemployment rate fell to almost 3.9%, its lowest level in 18 years.

"Workers are taking advantage of the tighter job market to find new opportunities and employers are poaching workers from other companies," said Nick Bunker, economist of the Washington DC job search website. . "The next question is how more to quit will mean an increase in wages."

(Chart – US labor market by sector: tmsnrt.rs/2drejuZ)

(Graph – Employment in the United States: tmsnrt.rs/1T9hBxK)