Job Openings Accelerating

Insights | Job Openings Accelerating

Author: David I. Templeton, CFA, Principal and Portfolio Manager

Today's release of the Job Openings and Labor Turnover Survey (JOLTS) shows the demand for employees continues to grow. The JOLTS report is released with a one month lag, but July's figures are indicative of a very strong demand for employees. The July report shows openings increased 749,000 to a record for the Survey of 10.9 million open positions. The blue line in the below chart shows the number of individuals unemployed for the period ending in August.

Job Openings for July 2021

Clearly, openings far outpace those looking for a job. The maroon line in the below chart shows the ratio of the number of unemployed individuals to the number of openings. Readings below one indicate there are more job openings than unemployed individuals. A result of this high demand for employees, the quit level has increased as seen with the blue line in the below chart.

Quit rate July 2021 and unemployed persons versus job openings ratio

Finally, the growth rate rate of openings is up 136% since April 2020, the date openings began to increase after the pandemic shutdown. Again, this rate of growth far outpaces the growth in hires. Enhanced Unemployment Insurance ended Monday, September 6, which we believe has been a recent headwind for actual job growth. As a result, strong job growth should occur in the balance of this year, all else being equal.

rate of job openings growth July 2021

HORAN Capital Advisors, LLC is an SEC registered investment advisor. The information herein has been obtained from sources believed to be reliable but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results. Market conditions can vary widely over time and there is always the potential of losing money when investing in securities. HCA and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only and is not intended to provide and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.