In the Labor Department’s November Job Openings and Labor Turnover Survey (JOLTS) report released earlier this week, all of the top line job market indicators moved in the wrong direction. Job openings, new hires, and quits fell, while layoffs and discharges rose slightly.
For now, there doesn’t appear to be much cause for concern. These movements are small blips on the radar. Over the course of the past twelve months, job openings have risen 16%, monthly hires 4%, and quits 7%, while layoffs and discharges have remained almost flat.
More Job Openings than Unemployed Job Seekers
Job openings have now exceeded unemployed job seekers for 8 straight months. In fact, there are more job openings than unemployed job seekers in every industry, except construction and nondurable goods manufacturing.
What makes those labor markets uniquely weak? Both have yet to recover from sizeable employment contractions that dislocated millions of workers.
The Lasting Effects of Historic Employment Contractions in Nondurable Goods Manufacturing and Construction
The number of Americans employed in nondurable goods manufacturing plummeted from about 7 million between the mid-1960s and mid-1990s to just 4.5 million by the end of the Great Recession. Employment in the sector has since edged up slightly to about 4.8 million, but while the recent growth has been encouraging, nondurable goods manufacturing employment is far below its heyday levels.
Whereas the decline in nondurable goods manufacturing employment was steady, sustained, and spread across 20 years, the blow to construction employment was steep and sharp and took place over just five years surrounding the Great Recession. At about 7.4 million workers today, construction employment has yet to recover to its pre-recession peak of more than 7.7 million.
While Some Industries Flag, Others Surge
Monthly hires are still sluggish in construction and real estate, compared with their levels in November 2006, the pre-recession hiring peak. But hiring in three other industries has soared way above 2006 levels—namely, in health care and social assistance; transportation, warehousing and utilities; and professional and businesses services.
There has been a clear divergence between hiring growth rates in those three industries and in others. While monthly demand for workers in other sectors remains weak relative to what it was 12 years ago, the three industries leading the pack are clocking new all-time records. Hiring in health care and social assistance hit a new record of 666,000 hires in the latest JOLTS report, whereas hiring in transportation, warehousing, and utilities reached its highest level ever of 270,000 one month prior.
