The Labor Department reported this week that 5.6 million jobs were created in March above the level of available workers, while the number of people leaving their jobs hit a record high.
According to the Job Openings and Labor Turnover Survey, job postings hit 11.55 million this month, a new record for data going back to December 2000. That's an increase of 205,000 from February and represents a job market that remains historically tight.
Meanwhile, the number of people leaving their jobs reached 4.54m, 152,000 more than the previous month, as the so-called “great resignation” continued. The era of the COVID-19 pandemic has opened up opportunities for workers who are confident enough to leave their current situation in order to find better employment elsewhere.
The report adds to the inflation picture and is expected to push the Federal Reserve into a series of aggressive rate increases, starting on Wednesday with half a percentage point.
Labour shortages during the pandemic led to a surge in wages, with average hourly earnings up 5.6 per cent in March from a year earlier. Still, that hasn't kept pace with inflation, which has been running at 8.5 percent over the same period.
Supply failed to keep up with demand in March, with the level of new hires actually falling slightly to 6.74m, despite an increase in vacancies. The total number of departures rose to 6.32 million, up nearly 4 percent from February.
Vacancies in the key leisure and hospitality sector fell by 45,000, down 2.6% month-on-month, while hiring rose by 40,000. The sector is considered a key indicator of economic recovery, with unemployment at 5.9 per cent, still slightly above pre-pandemic levels.
This week's release comes in the same week as the key Non-farm payrolls report for April. Economists polled by Dow Jones expect the economy to add 400,000 jobs and the unemployment rate to fall to 3.5%, which would match the pre-pandemic rate, which was the lowest since December 1969.