© Reuters. FILE PHOTO: FILE PHOTO: Job seekers apply for the 300 vacancies at a new Target retail store in San Francisco
By Lucia Mutikani
WASHINGTON (Reuters) – U.S. job openings continued to surge in July, despite more workers quitting their jobs in retail, professional and corporate services, likely due to fears of exposure to COVID-19 and childcare issues is.
Despite the surge in job vacancies reported by the Department of Labor in its monthly Job Opportunities and Turnover (JOLTS) survey on Wednesday, the number of unemployed looking for new jobs remained relatively high in July.
"Labor recovery is measured in years, not months," said Chris Rupkey, chief economist at MUFG in New York.
Job vacancies, a measure of labor demand, rose 617,000 on the last day of July to 6.6 million. Still, vacancies remained below their 7 million level in February.
The job openings were led by retailers with 172,000 new job openings. There were another 146,000 jobs in health and social services. In the construction industry, vacancies increased by 90,000. The number of vacancies rose from 4.2% in June to 4.5%, the highest level since October 2019.
The US financial markets were little moved by the data.
The number of people who voluntarily quit their jobs rose by 344,000 to 2.9 million. There were 152,000 retail workers who quit their jobs. 98,000 workers left the company in professional and business services. According to the state and local government, 35,000 workers quit in July.
Graphic: Job offers, settings and terminations from DataStream Chart – https://fingfx.thomsonreuters.com/gfx/rngs/USA-STOCKS/010071P436X/DataStream-Chart.htm
CHALLENGES TO CHILD CARE
While schools have opened for the new school year, many are running virtual classes. Problems in securing childcare have forced some workers, mainly women, to resign from their jobs. Women's participation in the labor force fell in April to levels last seen in the late 1980s and has not rebounded significantly since then.
The quit rate, which policymakers and economists consider to be a measure of confidence in the labor market under normal circumstances, rose from 1.9% in June to 2.1% in July.
"More dropouts during the pandemic likely reflect virus fear and childcare-related challenges given the current poor state of the labor market," said Lydia Boussour, a senior US economist at Oxford Economics in New York.
The JOLTS report followed last Friday's news that the economy created 1.371 million jobs in August, after adding 1.734 million in July. Approximately 10.6 million of the 22.2 million jobs lost in the depths of the coronavirus pandemic have been restored.
In July there were 2.5 positions per vacancy.
The JOLTS report showed that hiring fell 1.183 million jobs to 5.8 million in July. The number of people employed in the accommodation and catering sector fell by 599,000. In the health and welfare industries, it fell by 137,000.
However, federal government recruitment increased by 33,000, largely due to the 2020 census recruitment.
Overall, the hiring rate fell from 5.1% in June to 4.1%.
Layoffs fell in July, down 274,000 to 1.7 million, the lowest since March 2019. There have been declines in the manufacturing, transportation, storage, utilities and wholesale industries.
Although layoffs remain high as measured by the number of new unemployment benefits, economists believe the worst of the pandemic-related job cuts is likely over.
"It remains difficult to understand why different layoffs-related measures have sent different signals over the past few months, but some of the key measures suggest that we have overcome the worst layoffs related to the spread of the virus," the said Economist Daniel Silver at JPMorgan (NYSE 🙂 in New York.