September 10, 2021 by Clare Coffey
The most recent Jobs Report from the Bureau of Labor Statistics comes bearing good news, as well as indications of ongoing challenges as we recover from our bumpy 2020 economic year.
Let’s start with the good news: in August, over 235,000 new jobs were created. That’s still lower than the monthly average of around 586,000 new jobs. And it’s far lower than some economists’ predictions of well over 700,000 new jobs.
However, it’s important to put these numbers in context: both June and July saw higher than average job growth as compared to other years. And even if August’s growth looks relatively sluggish compared to recent months’ activity, it’s still 30% above the standard for August.
Similarly, the decline in unemployment is a mixed big. The ranks of the permanent job losers shrank by almost 450,000, but at 2.5 million, that still leaves us with 1.2 million more people out of work than we saw in February of 2020.
Getting those unemployment numbers down further will be a crucial component of the ongoing recovery. The long-term unemployed (27 weeks or more without a job) accounted for 37.4 percent of total unemployed in August, and fell by an encouraging, but modest, 246,000 during that time. Surmounting the obstacles needed to get these workers back into the labor force is a key concern of policymakers and employers alike.
According to the most recent JOLTS (Job Opportunities and Labor Turnover Survey), there was a whopping 10.9 million unfilled jobs. There are 55% more openings than there were before the pandemic–and employers were already talking about a talent crunch then.
It’s worth noting that this data was all collected in July, when jobs were growing much faster than they did in August. In other words, job growth and labor shortage are not mutually exclusive–and it’s worth wondering what job growth would look like with a full complement of re-employed workers.
But even getting to full employment may not resolve the labor issue fully. You can only employ the people you actually have. And, as Demographic Drought discussed, America’s people shortage is likely to be of long duration and increasing urgency.
To top it off, the skills needed to drive innovation and growth are changing rapidly. In Skills of Mass Disruption, we chart the ways employers are struggling to build hiring strategies when confronted with the two-pronged squeeze of fast-paced skill change and a short supply of talent.
The 2021 recovery is real and ongoing. But the biggest obstacles to it may run deeper than the temporary disruptions of the pandemic. Getting as many people as possible back into the workforce is a vital step for businesses, workers, and communities . But as the underlying people shortage grows more acute, retaining current employees, retraining underused talent in high-value skills, and sourcing workers from overlooked talent pools will only become more important.