WASHINGTON – The white-hot demand for U.S. workers cooled a bit in April, though the number of unfilled jobs remains high and companies are still desperate to hire more people.
Employers advertised 11.4 million jobs at the end of April, the Labor Department said Wednesday, down from nearly 11.9 million in March, the highest level on records that date back more than 20 years. At that level, there are nearly two job openings for every unemployed person. That's a sharp reversal from the historic pattern: Before the pandemic, there were always more unemployed people than available jobs.
The number of people quitting their jobs remained near record highs at 4.4 million in April, mostly unchanged from the previous month. Nearly all of those who quit do so to take another job, typically for higher pay.
The historically high number of unfilled jobs and the number of people quitting has forced employers to pay more to attract and keep staff. Those trends are driving solid wage gains for America's workers, particularly those that switch jobs.
The figures also suggest that hiring remains strong. On Friday, the government will release the monthly jobs report. Economists believe employers added 323,000 jobs in May, and that the unemployment rate ticked down to 3.5%, matching its pre-pandemic low, from 3.6%.
The healthy level of open jobs shows that companies are still trying to add staff and grow, even as inflation hovers near a 40-year high and the Federal Reserve has embarked on what could be its fastest pace of interest rate hikes since the 1980s.
“Employers' focus is on expansion despite high inflation and pending higher interest rates,” said Robert Frick, an economist at the Navy Federal Credit Union.
Yet higher pay also means many companies must raise prices to cover at least part of their higher labor costs, adding to inflation pressures, which Americans increasingly cite as a top concern.
Federal Reserve Chair Jerome Powell has targeted the high level of available jobs and hopes that by raising interest rates, the Fed can slow demand for workers and bring down the number of openings. Powell and other Fed officials have said their goal is to reduce openings and therefore slow wage increases to cool inflation, potentially without forcing many layoffs.
Job openings fell in restaurants and hotels, though remain quite high, and also dropped in health care and retail. They rose in manufacturing, warehousing, and construction. Construction firms have cited worker shortages for months as a key reason new home building has been delayed.
There are other signs that suggest job openings have leveled off or even declined a bit in recent months. The job listings website Indeed, which tracks all online job postings, says that recent job postings — those seven days old or less — peaked in February but remain high. In February, they were 90% above pre-pandemic levels, but by the third week of May, that figure had fallen to 74% — still a strong increase.
Some of the largest companies that have done the most hiring since the pandemic began have started to pull back. Amazon said last month that its warehouses were “overstaffed” and suggested the company would stop hiring.
Walmart executives made similar comments last month, citing “overstaffing” as part of the reason it fell short of profit projections in the most recent quarter. The company said it resolved the problem largely by not replacing workers who left.