Despite Drop in Job Openings, Labor Market Remains Tight, Says Expert

NTD Newsroom
By NTD Newsroom
January 18, 2020Business News

Job openings saw a sharp decline last November, according to numbers released by the labor department. But the labor market is expected to further tighten this year, says Frank Steemers, associate economist at The Conference Board, a non-profit research organization.

The number of job openings fell 561,000 to 6.8 million on the last business day of November, the U.S. Bureau of Labor Statistics reported on Jan. 17.

The largest decreases were in retail trade (-139,000) and construction (-112,000). Quits rate, which is considered a measure of workers’ willingness or ability to leave jobs,  was unchanged at 2.3 percent, and the layoffs and discharges rate was little changed at 1.1 percent.

“If we compare it to 2018, it is slowing down but we should keep in mind that 2018 was an especially strong year for economic growth, ” Steemers told NTD. “The main takeaway is that it is still very high historically, so many people are still feeling that the labor market is in a very healthy state.”

However, on the labor supply side, Steemers added, the labor force participation rates is only slowly increasing, and working age population barely growing at all.

“We’re still trending towards even tighter the labor market”, said Steemers.

NTD Photo
Working age population data from October 2018 to October 2019. (Federal Reserve Bank of St. Louis)
NTD Photo
Labor force participation rate from December 2018 to December 2019. (Federal Reserve Bank of St. Louis)

Faster Wage Growth for Low-Wage Workers

While job demand is high, wage growth is slowing. In December, average hourly earnings for all employees on private nonfarm payrolls rose only 3 cents to $28.32, according to data released by U.S. Bureau of Labor Statistics on Jan. 10.

But the income of the bottom 25 percent of wage-earners is rising at the fastest rate of all groups of employees, according to data published by the Federal Reserve Bank of Atlanta. The wages of the lower-most quartile grew by 4.5 percent in November from a year earlier, while wages for the top 25 percent increased by 2.9 percent over the same period.

“When we look at blue-collar workers, manual services workers, but also sales and office workers, generally workers in occupations where you do not necessarily need a bachelor’s degree to work in, there we see that wage grows much faster than the national average,” said Steemers.

And for the highly educated white-collar workers, including health care practitioners, people in financial services, and management occupations, Steemers said, “their wages are not really accelerating.”

Epoch Times reporter Tom Ozimek contributed to this report.