A surplus of available jobs is a good sign despite constant economic fears.
The U.S. jobs market is in a strange position as there are nearly two available jobs per job searcher, and many of them aren’t being filled.
A Bureau of Labor Statistics (BLS) report published yesterday says that the job available is above what they expected, with 11.24 million available jobs in July.
Analysts expected the number to come in at 10.3 million, so the actual number is a considerable jump.
Why it’s news
The positive job market news is good for the long-term health of the economy, despite months of fear over stagflation and recession.
Stansberry Research analyst Matt McCall says that the effect of this is going to be inflationary in the short term and that this surplus of available jobs will create problems for employers.
“If there are two job openings for every available worker, it gives the worker the upper hand when choosing an employer. This in turn forces the employers to offer a higher wage to employees, especially the upper echelon. In other words, it’s a job seeker’s market,” says McCall.
“Investors should try to keep the big picture in mind… because right now, the employment market is strong, and people who want to work have options. This is great for the U.S. economy in the long term,” he adds.
Backing up a bit
The United States is facing a hiring crisis and a so-called “Great Resignation” as millions of workers leave their jobs for greener pastures.
As we reported yesterday, employees are seemingly no longer willing to settle for $15 per hour, as Indeed searches for $20 per hour have surpassed lower wages.
Job mobility is increasing. Despite a large demand for work with 11.2 million job openings, more workers are refusing to work for lower-paying jobs and are resigning in large numbers to seek better options.
“Nowadays, changing jobs is as easy as changing your shirt. And in a job seeker’s market, it’s profitable, too… Since COVID-19, people who have chosen to switch jobs are averaging an annual wage-growth rate of 6.7% versus a 4.9% growth wage for those who stayed put,” says Stansberry.