New data released by the Labor Department reveals that job openings increased by 150,000 at the end of December to reach 10.9 million job openings in the United States — a high that is near July’s record of 11.098 million. This new data suggests that this increase in job openings signals that employment growth is still struggling in the United States. Since early 2021, the country has been dealing with a massive labor shortage. Now, it appears that this labor shortage may continue into 2022.
December also saw a lackluster jobs report on hiring, as only 199,000 new nonfarm jobs were recorded, the lowest new jobs recorded for all of 2021. This lackluster month came as a bit of a surprise to many economists, especially because other months towards the end of the year did quite well. However, December saw a slow increase of job hires — and a large increase in job openings.
This suggests that employers are still having a hard time finding employees to hire. The number of job openings went up, but the number of people being hired didn’t meet this labor demand.
While there are signs that this may continue into 2022, there are some economists who are still optimistic that the labor market will continue to recover and work itself out. Slowly, more and more people will return to the workforce — though it may take until the end of the year for this to really show. Many Americans are still refusing to reenter the workforce, for a variety of reasons, and this may not be worked out immediately. However, COVID-19 related reasons may go away — especially if the highly contagious Omicron variant slows down in its spread, which currently appears to be happening.
While people aren’t returning to the workforce, this isn’t the only reason why employers are having such a hard time accurately hiring people. There has also been a record number of people voluntarily quitting their jobs, whether for career changes or to retire. While this is good — as it shows people have faith in the job market and are assured that they will be able to find another job after quitting their last — too many people voluntarily quitting could harm the overall labor market.
However, economists do believe that fewer people will be voluntarily quitting their jobs in the future. Already in December, people leaving their jobs decreased by 161,000. While this number still remains incredibly high (at about 4.3 million), this is a sign that this trend is slowing down.
With all of this new data from the Labor Department, economists can now focus on forecasting what 2022 will bring. The first few months of the year likely won’t be big in too much business activity, so this may keep hiring at a slow pace. However, factories and jobs in the supply chain will likely continue to need new workers, especially as businesses try to build up their inventory in these first few months of the year.
