(CN) — American employers posted 6.6 million open jobs in July, an increase of more than half a million from the month before, while new hires dropped off by more than 1 million.
A Labor Department report released Wednesday shows that the number of job openings in the U.S. increased by 617,000 from June. But at the same time there were 5.8 million new hires in July, down from almost 7 million the month before, a sign that the recovery from the economic damage inflicted by the coronavirus pandemic could be on shaky ground.
The number of people quitting their jobs rose to 2.9 million, an increase of 344,000. While worker departures can be a headache for employers, economists see them as a positive sign because most people who quit do so for higher-paying positions.
Nick Bunker, economic research director at Indeed Hiring Lab, said that while the outlook for job seekers might not be as grim as some statistics have indicated, the situation could worsen if the economic pain continues.
“As of July, there are 2.5 unemployed workers per job opening. There haven’t been that many out-of-work job seekers competing for a new job since early 2014,” he wrote.
He added, however, that many jobless workers are waiting to be brought back to their old positions, and not counting those people the ratio of jobseekers to job openings is more like 1.4. If those temporarily unemployed workers can return to their jobs, the labor market might not be as bad as some think.
“But that assumption might be a big one,” Bunker said. “More lasting damage to the economy would result in more workers competing for fewer open jobs. The result would be a more cutthroat labor market for job seekers, where getting a new job quickly would be much more difficult.”
Total separations – which includes quits, layoffs and firings – stayed at the 5 million level in July. Layoffs and firings fell by 274,000 to 1.7 million.
Government job postings jumped by 17,000. There were 20,000 more job openings at the federal level, but 3,000 fewer in state and local government.
The private sector saw 600,000 more open jobs, including 173,000 in education and health services, 172,000 in retail trade, 123,000 in professional and business services, 90,000 in construction, and 62,000 in manufacturing.
Meanwhile, employers advertised 78,000 fewer leisure and hospitality jobs and there were 8,000 fewer openings in the financial and insurance sector.
The record high of 7.63 million job openings was set in November 2018.
Last week, the Labor Department reported the U.S. economy added back 1.4 million jobs in August, a slowdown from the previous two months. The labor market is still 11.5 million jobs short of where it was before the Covid-19 pandemic delivered a crushing blow to the economy in the spring.
Elise Gould, senior economist at the Economic Policy Institute, said Wednesday’s report on job openings and labor turnover shows a dramatic slowdown in hiring, which she noted is now just below pre-pandemic levels.
“This is particularly concerning given the enormous remaining jobs deficit,” Gould wrote. “Without congressional action to stimulate the economy, we are facing a slow, painful recovery.”