Jobs in the United States jumped by nearly a million to a new record in April, as more people voluntarily left their jobs, reinforcing the idea that a recent moderation in the growth of the employment was due to supply constraints.
The Ministry of Labor’s monthly job vacancies and turnover survey, or JOLTS report, also showed on Tuesday that layoffs reached a record high in April. Millions of unemployed Americans are staying at home amid childcare issues, generous unemployment benefits and lingering fears about COVID-19 even as vaccines become widely available and the pandemic abates.
“Evidence continues to grow that the lackluster job creation in recent months is the result of constraints on labor supply and that the labor market is tight,” said Conrad DeQuadros, senior economic adviser at Brean Capital in New York.
Job vacancies, a measure of labor demand, rose from 998,000 to 9.3 million on the last day of April, the highest level since the series began in December 2000. Job vacancies increased in all four regions and were spread across almost all industries as well as the government sector.
Unfilled jobs in accommodation and food services increased by 349,000. There were 115,000 additional vacancies in other services, while vacancies in durable goods manufacturers increased by 78,000. But job vacancies have declined in educational services and the mining and forestry industry.
Economists polled by Reuters predicted that job vacancies would rise to 8.3 million in April. The job vacancy rate hit a record 6.0% from 5.4% in March.
Hires climbed to 6.1 million in April, from 6.0 million the previous month. The government announced last Friday that job growth resumed in May as employers raised wages, but the pace of hiring fell short of economists’ expectations for a second consecutive month.
Companies are struggling to find workers even though around 9.3 million people are officially unemployed. Economists expect the labor market disconnect to be resolved in the fall. Government-funded unemployment benefits will end in early September. Republican governors of 25 states, representing more than 40% of the workforce, are ending federal unemployment benefits, including a $ 300 weekly subsidy, starting Saturday.
Schools are expected to fully reopen in the fall and more people are expected to be vaccinated against COVID-19. At least half of the adult American population is completely inoculated.
The JOLTS report also showed that 384,000 people voluntarily left their jobs in April, bringing the total to a record 4.0 million. About 106,000 workers in retail trade left their jobs, while professional and business services recorded 94,000 quits.
In the transportation, warehousing and utilities industry, 49,000 workers quit. The number of dropouts has increased in the South, Midwest and West regions. The resignation rate hit an all-time high of 2.7%, down from 2.5% in March.
The quit rate is normally viewed by policymakers and economists as a measure of confidence in the labor market. But nearly 1.8 million women have left the workforce since February 2020, mostly because of childcare issues.
With volunteer workers scarce, layoffs and layoffs fell by 81,000 to a record high of 1.4 million. There was one job open of 0.95 per unemployed person in April. The increase in job vacancies and voluntary departures could put pressure on employers to raise wages.
Stocks on Wall Street were mixed. The dollar (.DXY) appreciated against a basket of currencies. US Treasury prices were higher.
A separate Commerce Department report on Tuesday showed that the reopening of the economy was causing domestic demand to return to services from goods, with the trade deficit shrinking to an all-time high in April as imports declined.
The trade deficit fell 8.2% to $ 68.9 billion in April. The gap widened to a record $ 75.0 billion in March. Economists had forecast a trade deficit of $ 69.0 billion.
Imports of goods fell 1.9% to $ 232.0 billion. The decline was led by a $ 2.6 billion drop in imports of consumer goods, which reflected declines in textile clothing, toys, games and sporting goods, and household appliances. Imports of motor vehicles, parts and engines also declined.
But imports of cell phones and other household items have increased. Imports of food, feed and beverages were the highest on record, as were capital goods. Imports of services rose $ 0.7 billion to $ 41.9 billion in April. They were lifted by travel and transportation services.
“With the pandemic under control, consumers are shifting spending toward services produced domestically and away from imports,” said Bill Adams, senior economist at PNC Financial in Pittsburgh, Pennsylvania.
Exports of goods rose 1.1% to a record $ 145.3 billion, boosting shipments of civilian aircraft. Exports of industrial supplies and materials were the highest on record, with crude oil shipments increasing by $ 1.0 billion. But exports of motor vehicles, parts and engines fell. Auto production has been hit by a global semiconductor shortage.
Food, feed and beverage exports were the highest on record. Exports of services increased by $ 0.7 billion amid small gains in travel, transportation and user fees for intellectual property.
At $ 17.8 billion in April, the services surplus was the smallest since August 2012. Exports are expected to continue to rise as global economic growth accelerates.
Adjusted for inflation, the goods trade deficit narrowed $ 7.2 billion to $ 98.6 billion in April.
Trade held back growth in gross domestic product in the first quarter. Most economists expect double-digit GDP growth this quarter, after the economy grew at an annualized rate of 6.4% in the third quarter.
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