Supply and demand imbalance in US jobs market hits record, JOLTS survey shows

The supply and demand imbalance in the US jobs market reached record proportions in October, the results of a closely-followed survey revealed.

The supply and demand imbalance in the US jobs market reached record proportions in October, the results of a closely-followed survey revealed.

According to the Department of Labor's JOLTS labour market survey, the number of people being hired slipped by 82,000 to 6.46m.

That happened even as the number of job openings, one measure of demand for labour, grew by 431,000 to reach approximately 11.03m.

As Mickey Levy and Mahmoud Abu Ghzalah at Berenberg Capital Markets pointed out, that widened the gap between hires and openings by 500,000, pushing it to a record 4.57m and 3.0m above its level in February 2020.

"This suggests the imbalance between labor demand and supply intensified in October, with labor demand continuing to outstrip labor supply significantly," they said.

The number of total separations in the work force meanwhile dropped by 255,000 to 5.89m.

In parallel, the so-called 'quits' rate, which tracks voluntary separations and therefore also provides some indication of demand, also fell, from 3.0% to 2.8%.

Yet the quits rate remained elevated by historical levels, the two economists added.

The number of quits fell by 205,000 to roughly 4.16m.

"October’s decline in quits could reflect heightened uncertainty due to the delta variant and rising nominal wages, particularly for lower wage employees, that have reduced job-switching incentives," they explained.

"For example, the quits rate for leisure and hospitality workers dropped to 5.7% in October, a 0.5 pp decline from September."