On the first Friday of most months, the Bureau of Labor Statistics (BLS), a component of the U.S. Labor Department, releases its monthly employment report. That report details job growth for the most recently ended month as well as revealing the latest estimate of unemployment. It garners headlines.
But there are other labor market releases that are arguably just as important. Among them is the Job Openings and Labor Turnover Survey (JOLTS), also released by the BLS. This report fails to gain as much attention, but is scrutinized by many economists because it provides such rich detail regarding the internal workings of the labor market.
In this report, one will find statistics such as the quits rate, the hiring rate, and the number of available job openings. Many observers will remember that according to an initial estimate from the headline jobs report, America added 266,000 net new jobs in April 2021. That was deeply disappointing. Many economists had predicted that the employment report would indicate that the nation added more than 1 million jobs that month.
Many economists have puzzled over why April fell so short of expectations. As it turns out, JOLTS data offer the answers. According to that report, on the last business day of March, the number of available, unfilled jobs in America reached a record high of 8.1 million. That tally was nearly 600,000 greater than the previous month’s. Industries registering the largest increases in available jobs openings were accommodation and food services (+185,000), public education (+155,000), and the segment that encompasses entertainment and recreation (+81,000). In other words, April didn’t fall short because of a lack of demand for labor. Demand for workers has been skyrocketing as the economy has reopened and many households look for ways to put their bloated savings to work.
If labor demand is not the problem, then it must be labor supply. In some sense, this is nothing new. As the pandemic loomed, American unemployment had declined to a 50-year low of 3.5 percent. That rate had not been observed in more than 50 years. Starting in March 2018 and stretching through February 2020, the month before the pandemic ravaged the U.S. economy, there were more available job openings than there were unemployed people.