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Wednesday, May 12, 2021

The labor demand story continues.

At the end of March, a record number of jobs were open in the U.S.

The latest Job Openings and Labor Turnover Survey — or JOLTS report — from the BLS published Tuesday showed some 8.1 million jobs were available at the end of March. The prior high for this series, which dates back to 2001, came in November 2018.

For readers of The Morning Brief, this report may have come as little surprise. As we covered earlier this week, the most important takeaway from the April jobs report is that while hiring fell well short of expectations there is no lack of demand for labor among employers.

But the JOLTS data does show how acute the hiring challenge is right now. And also helps us understand how different this labor market recovery is from the last recession.

Jed Kolko, chief economist at Indeed, noted Tuesday that the job-filling rate — or the number of hires in a given month as a proportion of jobs open — hit an all-time low in March. And this coming during a month when nonfarm payrolls grew by 770,000. It seems likely this measure falls further in April.

The number of jobs open per unemployed worker also fell below 1 last month, a measure that was closely watched after the financial crisis as a sign workers were beginning to gain leverage in the labor market.

But in another report published Tuesday, the team at Indeed showed that the change in jobs open through last Friday was flat compared to the prior week. A notable shift after a sharp ramp in job listings had been observed over the last two months.

And while the number of jobs open across the economy are some 23% higher than what Indeed saw in February 2020, hospitality and tourism jobs are still 8% below those levels.

So between April's disappointing job gains, the stalling out in the number of open positions listed on Indeed, and a record JOLTS number, we get a clear portrait of today's labor market. Employers want help, but employees will only accept jobs under certain conditions. Simply listing open jobs is not going to bridge this divide.

In response to business owner complaints, we've started to see some states around the country end participation in the federal government's enhanced unemployment program. And as we noted in yesterday's Morning Brief, some employers are raising wages and responding to employee requests like more schedule clarity to attract and retain talent.

Michael Pearce, an economist at Capital Economics, wrote Tuesday that, "wage growth has remained unusually elevated throughout the pandemic, and the signs of labor shortages point to wage growth accelerating further."

"They are not yet pointing to a surge in wage growth," Pearce adds, "but with labor market conditions tightening further, that could just be a matter of time."

By Myles Udland is a reporter and anchor for Yahoo Finance Live. Follow him at @MylesUdland

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