Demand for workers in manufacturing, construction and human resources is leading the rise in job postings.
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The red-hot job market is getting even hotter, new data from online hiring site Indeed released Wednesday shows.
Job postings through June 4 are up 28.6% from Feb. 1, 2020, the pre-pandemic baseline. Postings have increased in May and early June by 1.1 percentage points a week and while that is down slightly from earlier periods, it still means jobs are plentiful.
The report follows Tuesday’s release by the Bureau of Labor Statistics showing employers added nearly 1 million new openings in May, to a record 9.3 million positions.
Companies across the economy are reporting difficulty filling positions as the country gets back to normal with more than 50% of Americans fully vaccinated and businesses, restaurants and other establishments reopening. The Transportation Security Administration said airports had screened almost 2 million passengers Sunday, the highest number of travelers since the pandemic began in March 2020.
“Job postings in nearly all sectors are above the pre-pandemic baseline, led by goods-related sectors like manufacturing, loading and stocking, and construction,” said Indeed Chief Economist Jed Kolko. “The big laggards remain hospitality and tourism and sports, which are still below the Feb. 1, 2020 baseline.”
Job postings for human resource workers, meanwhile, spiked 15.3% in the past four weeks, according to Indeed.
But while that is good news to those looking for work, it is a troubling development for businesses, which are being forced to raise wages, offer hiring incentives and provide schedule flexibility to entice job applicants. That, in turn, is fueling a rise in inflation. The consumer price index rose 4.2% on an annual basis, the largest increase since 2008.
All eyes will be on the release of the inflation data for May, coming Thursday.
“The labor market is facing a set of uncertainties it has never seen before,” said Joel Naroff, chief economist at Naroff Economics. “Yes, there have been labor shortages before, but not at current levels. There is government policy that, at least to some extent, has elevated the number of those receiving unemployment compensation. But maybe most importantly is the issue of reopening offices and whether employees can or will work from home.”
That last point was evident in a report released Thursday by Jobcase, a social media platform for workers, which found that 34% of those surveyed are not comfortable returning to work. The reasons cited were health and coronavirus-related concerns, at 31%, followed by low pay, at 13%.
Some economists and many Republican officials, particularly governors, blame the enhanced unemployment benefits that have been part of congressional stimulus relief packages for providing a disincentive for many low-income workers to resume jobs. Twenty-five states have said they will prematurely end the $300-a-week addition before it is set to expire in September.
Michael Farren, an economist at the Mercatus Center at George Mason University, uses the metaphor of a sports team to raise the issue of the enhanced benefits. He says the players on the field are the employed workers, with players on the sideline asking the coach to put them in as unemployed workers looking for jobs.
“Then there are players – perhaps injured, catching their breath, or just content to sit things out – who are seated on the bench,” he wrote in an op-ed last Friday. “Meanwhile, retirees and children watch from the stands.”
While acknowledging factors such as health fears, child care difficulties and seasonal variations in government data could explain some of the shortfalls in recent jobs numbers, he says, “That seems to leave the federal expansion of unemployment insurance as a major driver of workers’ decisions to remain on the sidelines.”
The debate is likely to be settled, soon, he added, with half the states about to end the benefits early. “If we see these states experience more employment growth than other states, we’ll have a pretty clear idea of what the culprit was. Stay tuned.”
But Fred Goff, co-founder and CEO of Jobcase, disputes that.
“We reject the narrative that extraordinary unemployment benefits are keeping people on the sidelines and (the company’s research) backs it up,” he said in a statement. “Employers cannot only attract great talent today, but they can hire for long-term retention as well – they simply need to step up and value workers as much as they do shareholders. It’s that easy.”
One thing is certain. No matter who is right, companies are already paying up for talent and that is drifting down to consumers in the form of higher prices. Chipotle, for example, announced in May it would raise wages to $15 an hour by the end of this month. Wednesday, the company began hiking its prices by 4%, though increased cost of ingredients was also a factor in that decision.
