Americans Taking Advantage of Tight Labor Markets

October 19, 2018

With employees quitting at the fastest rate in 17 years and 68 percent of U.S. adults saying it’s a good time to find a quality job, can faster wage growth be far behind?

The job opening rate and number of job openings are at record highs, according to the latest BLS report.  The August job opening rate of 4.6 percent is significantly higher than the previous record of 3.9 percent set during the dot-com era in 2001 and the average rate of 3.0 percent during the last economic expansion that ran from 2006 to 2008.

Employers are hiring at their fastest pace since 2007 but still cannot make a dent in the number of job openings they have.

And Americans are quitting their jobs at the highest rate (2.4%) since before 9/11 (2.6%), and are leaving their jobs at twice the rate employers are laying them off (1.2%).

Americans have record-high confidence in the job market with the latest Gallup poll tying July's measure as the highest in Gallup's trend dating back to August 2001.  November 2000 was the last time overall economic confidence was higher.

Outlook:  Although employers are understandably reluctant to increase fixed labor costs, with tight labor markets getting tighter and the economic expansion expected to continue for at least another two years, employers may be forced to significantly increase wages to attract the talent they need.