Laid-off Americans struggle to find work despite 9.6 million job openings
At first sight, the Labor Department’s latest weekly report on jobless claims showed no signs of economic stress. That's until you dig a little below the surface.
Filings for first-time unemployment benefits declined by 3,000 to 217,000 last week, signaling that the labor market remained in good condition. But the number of recurring applications spiked to a six-month high, based on the latest available data.
These so-called continuing claims, representing workers who still receive benefits after their first week of aid, rose by 32,000 to 1.834 million for the week ending Oct. 28. It was the seventh consecutive weekly gain.
There’s usually a one-week data lag between initial and continuing jobless claims.
The data suggests that many Americans who were laid off haven’t been able to get rehired despite there being 9.6 million job openings in the country. How could this be?
Are there really that many openings?
Data on job openings come from the Labor Department’s JOLTS report, which reveals how many workers were hired, laid off, or quit their jobs.
The latest report showed that vacancies were up for a second straight month and that there were 1.5 job openings per unemployed person. In theory, this means there should be plenty of jobs for people who want one.
By definition, people receiving unemployment benefits want to work. If they’re not actively looking for a job, they won’t receive benefits.
As it turns out, JOLTS may not be an accurate measure of actual job openings.
Economists regularly complain that the JOLTS survey has a low response rate, making it less reliable. As Bloomberg reports, some employers post job ads with no intention of actually filling the role—a cruel process known as “ghosting.”
Tennessee-based recruiter Vincent Babcock had a slightly more nuanced take on employers who ghost their applicants.
“They’re posting jobs with the intention of hiring, but not anytime soon,” he told The Wall Street Journal.
Other companies will recruit for positions they think need to be filled later to build a pool of qualified applicants.
“Even if you don’t have jobs, you can start pipelining and filling for roles when things pick up,” said Jamie McLaughlin of recruiting agency Monday Talent. “It all adds up to why these jobs stay online.”
A cooling labor market
Looking at official hiring statistics, it’s clear that the labor market is losing steam. The official nonfarm payrolls report last week showed that employers added 150,000 workers in October, far fewer than what was predicted.
Government economists also quietly erased a combined 101,000 jobs from the August and September numbers. It turns out hiring wasn’t nearly as strong as initially reported.
ADP’s private payrolls report, which uses a different methodology for collecting job data, just posted its worst two-month stretch of hiring in over two years.