PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Job Openings at All-Time High

By at 12 February, 2019, 1:59 pm

Small Business Insider

by Raymond J. Keating-

The U.S. Bureau of Labor Statistics has reported that in December 2018, job openings hit 7.3 million. That’s an all-time high for a data set that began in 2000.

Also during December, hires registered 5.9 million, with separations (i.e., including quits, layoffs and discharges, and other separations) coming in at 5.5 million.

A few quick takeaways:

First, the rising job openings numbers points to resilient, continuing economic growth.

Second, the tightness of the labor market is driven home by the fact that 7.3 million job openings in December topped the 6.5 million unemployed during the month.

Third, the quits rate registered 2.3 percent in December, with it ranging between 2.3 percent and 2.4 percent since March 2018. The high came in at 2.6 percent in January 2001. The rate has been climbing since the low of 1.3 percent in February 2010. (See accompanying chart from the Federal Reserve bank of St. Louis.)

A rising quits rate signals growing confidence among workers, that is, they’re confident in quitting one job for another. During poor economies, workers tend to hunker down in their current jobs, hoping for the best.

Fourth, on the tight labor market issue, the labor force participation rate, even with recent increases, remains around historically low levels, especially considering where we are in the current economic expansion. Indeed, at this point, the labor force is short of where it should be by some 4.5 million to 6.5 million workers. Getting those workers back into the labor force would accomplish much in terms of alleviating tight labor markets – at least in some sectors.

Finally, it must be noted, that labor shortages now and in the future can be partially offset by shifting to a welcoming, pro-growth immigration policy, whereby enhanced border security is combined with an expanded and more efficient legal immigration system that attracts needed workers at various skill levels, as well as entrepreneurs who will start up and build new businesses.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

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