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Labor Market Continues to Tighten

The number of job openings at private sector (non-governmental) employers hit a new high of 5.4 million in July, according to data released this morning by the Bureau of Labor Statistics. There were about 1 million more openings than the previous peak in 2007.

As a percentage of employment, the openings rate now stands at 4.2 percent, matching highs from earlier in 2016 and 2015, and well above the peak of 3.6 percent hit during the previous expansion (Chart 1).

When it comes to filling those jobs, the challenge is getting more difficult from an employer’s perspective. The pool of available workers — the sum of unemployed people currently looking for work plus people who want a job but haven’t looked in the past 30 days — has fallen to 13.7 million. That’s down from the peak of 21.2 million, just after the end of the Great Recession.

That translates to about 2.33 available workers for every job opening, the lowest number of available workers per opening since 2001 (Chart 2).

Add in the fact that are often regional and skill-set mismatches between job openings and available workers, and these data suggest the labor market may be quite tight. This would also suggest support for better wage growth, as employers bid up wages to lure the best candidates to fill open jobs.

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