Is The U.S. Job Market Cooling, Or Are Employers Still Having Trouble Finding Workers?

The U.S. Department of Labor (DOL) announced last week that there were 7.1 million jobs open in the country in August. This number, which was at an 18-month low, is closely watched as an indicator of the health of the employment market (and the likelihood of a coming recession), and also because it is a gauge of how difficult it is for employers to find willing workers in the current economy. On the first question – how the job market is doing – Reuters last week said the 7.1 million figure suggests “employment growth was slowing largely because of ebbing demand for labor as the economy loses momentum.”

While that might be true, MUFG Chief Economic Chris Rupkey told Reuters the news was not an indication that the United States is on the brink of recession. He said, “The labor market is slipping a little, but it’s not flashing any recession signals yet … You can’t have a recession with 7 million help wanted signs posted up in factory and store windows around the country.”

The U.S. Chamber of Commerce seemed to agree with that assessment. In a blog post last week, the U.S. Chamber noted there is “barely one available worker for every job opening in America” and said the August DOL report “is continuing evidence of historically tight labor market conditions over the past year and a significant ‘people gap’ challenge with regard to the American workforce.” The U.S. Chamber’s Worker Availability Ratio, an analysis developed by the organization to measure the number of available workers for every job opening, was at 1.10 in August, meaning there were 1.1 available workers for every job vacancy. That figure was virtually unchanged from its 1.08 reading in July and its 1.09 reading in June.

The index’s 12-month moving average, meanwhile, remained at the historically low level of 1.04 available workers per job opening for the fifth consecutive month.

The Worker Availability Ratio includes 6.2 million individuals who are “actively job seeking” employment and 1.56 million individuals whom the U.S. Bureau of Labor Statistics classifies as not in the labor force but “marginally attached,” meaning they want jobs, are available for work, and have looked for work in the past year, but have not actively looked for work in the most recent month. That total of 7.77 million available workers compares to the 7.03 million job openings reported by the DOL in August.

One of the few sectors with fewer job openings in August than unemployed persons whose last job was in that sector was manufacturing, which had 384,000 openings and 512,000 unemployed individuals. The U.S. Chamber concluded that its analysis shows “the U.S. labor market today continues to be remarkably tighter than a decade ago, when there were approximately eight workers available for each open job.”