The number of available jobs in the U.S. leveled off late this summer, the latest sign momentum in the labor market is easing six months after the coronavirus pandemic took hold in the U.S.
The increase in the number of job postings, a real-time measure of labor-market activity, has slowed dramatically since late July, and last week stood about 20% below 2019 levels, according to data the job-search site Indeed.com shared with The Wall Street Journal.
Job postings on the site plummeted this spring when the pandemic hit. By May postings were 33% below February’s prepandemic level. But as states allowed many businesses to reopen, demand for labor improved steadily through July, and in August postings were about 12% below the early February level. Since then, the level of postings has largely plateaued and remained well below year-earlier levels. February is typically a low point during the year for hiring.
The job-postings data comes as the economy continues to dig out of the deep hole created by efforts to contain the pandemic. The August unemployment rate fell to 8.4% and employers added 1.4 million jobs, but the labor market still had about 11.5 million fewer jobs than before the pandemic. Consumer spending, a driving force for the economy, also grew over the summer, rising in July for the third straight month. Growth, meanwhile, has picked up in the third quarter, economists say, following a steep second-quarter decline.
“There’s been pretty much a flat line in the job-postings trend since early August,” said Indeed economist Nick Bunker. “While labor demand has recovered somewhat from the huge shock caused by the virus, we’re still below prepandemic levels.”
The flattening trend in postings reflects a recent slowdown in demand for workers in some consumer-facing industries, such as food service, retail and drivers, he said. “There was an initial surge when the economy reopened but in the past few weeks those businesses may have decided they don’t need to keep ramping up,” he said.
The Indeed data showed job postings in hospitality and tourism were down more than 40% in late August from a year earlier, and postings in food service were down more than 20%. However, demand for labor in a few sectors, including construction and loading and stocking, fully recovered to 2019 levels. That likely reflects a strengthening home-building sector and more consumers ordering goods online for delivery.
The number of weekly shifts workers reported for rose 0.5% in August from July, according to Kronos, a workforce management software company. That was the third straight month the pace slowed, and is down from a 2.7% gain in May. Shifts worked rose at the same 0.5% pace the first week of September, Kronos said Wednesday.
“Businesses brought some employees back from furlough to allow them to open back up very quickly in late spring,” Dave Gilbertson, Kronos vice president of strategy and operations, said Wednesday. Companies “will need to see consumer demand returning to re-accelerate hiring into the fall. That hasn’t yet happened.”
The Indeed data is consistent with other measures showing that while the labor market is still improving, the pace of gains appears to be slowing. Payroll growth in August was a historically strong increase—and the third straight monthly decrease in net hiring. Similarly, jobless claims, a proxy for new layoffs, slowed their descent in August after declining fairly steady from a March peak.
The number of weekly shifts workers reported for rose 0.5% in August from July, according to Kronos, a workforce-management software company. That was the third straight month the pace slowed and is down from a 2.7% gain in May.
“We’ve only recovered about half of the jobs that were lost during the early days of the pandemic, and there is very little new job creation actually taking place,” Dave Gilbertson, Kronos vice president of strategy and operations, said last week. He said most recent employment gains reflect workers being recalled to old jobs.
On Wednesday, the Labor Department separately issued its monthly report on labor demand, showing a seasonally adjusted 6.6 million available jobs on the last business day of July. That was up from 6.0 million at the end of June, but down from 7.2 million a year earlier.
The Job Openings and Labor Turnover Survey lags behind the more closely watched monthly jobs report and private-sector data by about a month.
The level of job openings in July was well exceeded by the 16.3 million people who were unemployed that month, according to the Labor Department. That is a sharp turnaround from a year ago. From early 2018 until February of this year, job openings exceeded the number of active job seekers without work.
Wednesday’s Labor Department report showed the number of workers hired fell in July to 5.8 million from 7 million in June. Total separations increased slightly to 5 million from 4.9 million in June. The number of layoffs fell, but that was offset by increased quits and retirements.
Workers quitting their jobs is typically a sign of increased confidence, said Oxford Economics economist Lydia Boussour. But “more quits during the pandemic are probably a reflection of virus fear and challenges related to child care given the current weak state of the labor market,” she said.
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Write to Eric Morath at [email protected]
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