U.S. job openings soar to record 8.1 million, but businesses can’t find enough workers

Businesses have a record 8.1 million jobs to fill. The problem, they say, is getting […]

Businesses have a record 8.1 million jobs to fill. The problem, they say, is getting enough people to fill them.

Job openings in the U.S. topped 8 million in March for the first time ever, the Labor Department said Tuesday. There were 7.5 million open jobs in February.

The number of job openings is now well above prepandemic levels and easily exceeds the all-time peak of 7.57 million set in November 2018. They had fallen to as low as 4.6 million last year in the early stages of the pandemic.

Yet many companies say they are struggling to find qualified workers to hire. A record 44% of small businesses, for instance, said they could not fill open jobs in April, according the National Federation of Independent Business.

Some contend that extra government unemployment benefits have given people less incentive to take a job. The Biden administration in March approved $300 in extra federal benefits each week to unemployed workers as part of a massive $1.9 trillion stimulus.

The debate over jobless benefits intensified after the government last Friday reported that a paltry 266,000 new jobs were created in April. Wall Street had forecast a much larger increase of 1 million.

The disappointing report spurred Republicans in Congress and the U.S. Chamber of Commerce to call for the end of federal unemployment benefits. They aren’t set to expire until September.

A handful of Republican-led states have also reinstituted rules requiring people to look for jobs, and at least one plans to stop providing the federal stipend to the unemployed.

The Biden administration, for its part, said there’s little evidence unemployment benefits are dissuading people from taking jobs. They blamed closed schools and daycare centers, saying many parents have to stay home to care for children.

What happened: Job openings rose the most in March at restaurants and hotels, two of the industries hurt the most by the pandemic. Job openings in the sector increased by 185,000 to 993,000 — the second highest level ever.

Rising U.S. vaccinations rates and falling coronavirus cases have enabled governments to ease business restrictions. Many Americans are also eager to go out to eat, travel or take a vacation. That’s allowing companies to rehire workers and increase customer occupancy.

The same trends are benefiting theaters, amusement parks and other entertainment companies. Job openings also rose sharply in March.

As more schools began to reopen, state and local government also posted more job listings.

Not every industry was looking to hire more workers. Job openings fell in health care and social services, where employment rebounded earlier in the pandemic.

About 6 million people were hired in March, but that still left more than one in four job openings unfilled. The gap between available jobs and the number of people hired has widened dramatically in the past four months.

Separations — layoffs, firings, retirements and so forth —fell to the lowest level in six months. And layoffs were at an all-time low.

The so-called quits rate, meanwhile, rose one tick to 2.7% among private-sector employees and matched a 20-year high. More people quit when the economy is doing well.

A rising number of employees quitting signals they are being more selective and think they can find a better job.

At the height of the coronavirus crisis, the quits rate had fallen to a seven-year low of 1.8%. 

The government’s job-openings report is released with a one-month lag.

Big picture: Many companies are eager to hire more workers to keep up with rising demand for their goods and services. Yet it could be a challenge until most schools, day-care centers and nursing homes fully reopen and extra federal benefits expire.

Some companies are raising pay and benefits to draw job applicants and more are expected to do so. For example, Chipotle said it’s increasing wages for employees as it seeks to hire 20,000 more people.

A lot is at stake.

A rapid recovery in the U.S. economy could be stunted, for one thing. And some 8 million jobs that existed before the pandemic are still missing. The longer it takes to regain them, the more likely the economy will suffer long-lasting scars from the pandemic.

What they are saying? “Demand for workers is literally off the charts, and these data, even though they are for March, underscore the point that … the shortfall in payrolls says more about the lack of supply of workers than economic weakness,” said chief economist Stephen Stanley of Amherst Pierpont Securities

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