The October JOLTS release this morning showed that we’re still in the thick of the “Great Resignation,” although for some industries, particularly the crucial supply chain industries, shortages might be easing.
There were 11 million openings on the last day of October, an increase from last month and the second highest number of openings in 2021, close behind the peak in July, according to the federal Bureau of Labor Statistics.
The largest increase in openings by far was in the Accommodation and Food Services Industry with an additional 254,000 openings, an almost 20% increase from the previous month.
Additionally, the rate of unemployed workers to job openings reached a new low for the past two years with only 67 unemployed workers for every 100 job openings.
As the U.S. heads into the holiday season, the large number of openings combined with the dropping number of unemployed suggests that the labor market remains very tight, with labor shortages continuing as we approach the end of the year.
The number of hires remained largely unchanged at 6.5 million, while separations fell slightly from 6.1 million to 5.9 million. Lots of eyes were on the quits rate, which reached record highs last month. This month the number of quits fell slightly from 4.4 million to 4.2 million.
Of course, it’s important to remember that although the quits number decreased, we’re still seeing record high numbers compared to previous months.
Interestingly, while the number of quits generally fell across industries, it fell the most in Finance and Insurance and Transportation, Warehousing and Utilities, suggesting that perhaps some of the pressures in these industries are easing. We see a similar pattern emerging in our postings data, as the number of postings fell around 20% in both the Retail Trade and Transportation, and Warehousing industry. Transportation and Warehousing, of course, are at the core of the supply chain problems plaguing the economy.
Finally, one possible explanation for the continuing numbers of quits may be found in the Business Formation Statistics released by the U.S. Census Bureau. The Business Application Series reports the number of business applications for tax IDs as indicated by applications for an Employer Identification Number (EIN) through filings of the IRS Form SS-4. Additionally, it records the number of applications that would have a high propensity for turning into a business with a payroll (as opposed to a single independent contractor).
Since the start of the pandemic, there has been a large sustained jump in the number of business applications being filed, particularly in the Retail Trade, Professional Services and Transportation and Warehousing industries, suggesting that workers may be leaving their jobs to strike out on their own.