US JOLTS Numbers Signal Skills Mismatch in Jobs Market
Tuesday, the US Labor Department’s monthly Job Openings and Labor Turnover Survey, aka JOLTS, suggests that the recent moderation in job growth could be the result of a skills mismatch rather than easing demand for labor.
JOLTS is 1 of the metrics on Fed Chairwoman Janet Yellen’s so-called dashboard of labor market indicators. It came ahead of the US central bank’s 13-14 June policy meeting, at which it is expected to raise its benchmark overnight interest rate by 25 basis points.
Job openings, a measure of labor demand, increased 259,000 to a seasonally adjusted 6.0-M in April, the highest since the government started tracking the series in Y 2000.
The monthly increase was the largest in just over a year and pushed the jobs openings rate to 4.0%, the highest since last July, from 3.8% in March.
Hiring decreased by 253,000 jobs to 5.1-M. That lowered the hiring rate to a one-year low of 3.5 from 3.6% in March.
The gap between job openings and hiring points to a growing skills mismatch. A report from the National Federation of Independent Business last week showed the share of small business owners reporting job openings they could not fill in May was the highest since November 2000.
The economy created 138,000 in May, well below the average monthly job gains of 181,000 over the prior 12 months.
Economists believe tightening labor market conditions could soon unleash a faster pace of wage growth. Wage gains have remained sluggish even as the unemployment rate has tumbled to a 16-year low of 4.3%.
The JOLTS report also showed 1.6-M people were laid off in April, little changed from March. The layoffs and discharges rate was unchanged at 1.1% for 5 months running. The number of people voluntarily quitting their jobs fell by 111,000 to 3.0-M in April.
As a result, the quits rate, which the Fed looks at as a measure of job market confidence, dipped to 2.1 from 2.2% in March.