One chart shows how the pandemic made it much harder to fill jobs than ever before

Job openings hit a new record high in May, while unemployment is still around 6%.
That’s weird because historically, openings go up as unemployment goes down.
The pandemic has at least temporarily blown that relationship out of the water.
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In a normal labor market, the number of open positions that businesses are hiring for tends to go up as unemployment goes down, as available workers become more scarce and openings become harder to fill.
Like so many other aspects of American life, the pandemic has at least temporarily shattered that relationship.
There were a record-high 9.2 million job openings in May, according to the latest data from the Bureau of Labor Statistics. Meanwhile, the unemployment rate that month was 5.8%.
The last time unemployment was at 5.8%, in November 2014, there were 4.8 million job openings, just over half as many as this May. Throughout the last year, there have been many more job openings than would be expected given the millions of Americans out of work and looking for a job, indicating just how hard it is for employers to fill jobs right now. It also suggests that the unemployment rate doesn’t quite correspond to the number of people urgently looking for work, at least not in this economy.
This chart shows the historical relationship between unemployment and job openings, going back to December 2000, the first month the Bureau of Labor Statistics started tracking openings. The pandemic era, from March 2020 through May 2021, is highlighted in red:
The pre-pandemic era, shown in blue in the above chart, shows the normal relationship of low unemployment corresponding to high job openings. When unemployment is high, there are many fewer job openings, reflecting overall economic weakness.
The pandemic brought about historic high unemployment rates as businesses shuttered last spring. As unemployment has more or less steadily fallen since then, job openings have increased, but at a much higher level than ever before.
The last few months are particularly odd – while the unemployment rate has held steady at around 6% since the start of 2021, the number of job openings has steadily marched upward, from around 7.1 million in January to 9.2 million in May.
The New York Times’ Ben Casselman highlighted a similar metric in a tweet, noting that there’s now about one unemployed worker per job opening. In the hot labor market before the pandemic hit, there were more openings than Americans out of work and looking for a job, but the unemployment rate during that period was below 4%, far lower than the roughly 6% of the last few months:
-Ben Casselman (@bencasselman) July 7, 2021The record-high job openings are another sign of how hard it is for businesses to find workers right now. The US Chamber of Commerce referred to the labor shortage as "the most critical and widespread challenge" to businesses. Businesses have been raising wages and offering signing bonuses to attract workers off the sidelines.
Several factors could be contributing to the difficulty in hiring. The pandemic is still ongoing, with thousands of new COVID-19 cases still being reported per day, and about a third of American adults remain unvaccinated. Difficulty in accessing childcare presents an obstacle to parents. Enhanced unemployment benefits could reduce the urgency to take the first job that becomes available.
Over the next few months, those should all abate, as schools reopen, vaccinations continue, and federal unemployment benefits expire.
It remains to be seen if the labor market will return to normal as well.
Read the original article on Business Insider

Source: https://www.businessinsider.com/chart-job-openings-are-very-high-relative-to-unemployment-2021-7

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