Charting the Lift in U.S. Job Market as Trump Seeks ElevationBy
Record job openings, slower hiring put focus on skills gap
Wage growth at or near post-recession highs in some sectors
America’s labor market is at cruising altitude. President Donald Trump wants to give it even more elevation.
Unemployment reached a 16-year low of 4.3 percent in May and payrolls have increased by more than 15 million since the end of the last recession in June 2009. A record number of job openings shows companies remain on the hunt for workers and dismissals are near their lowest since the 1970s.
As a tighter job market leaves more and more companies unsuccessful in their bid to fill slots with skilled laborers, the pace of hiring is cooling. The reduced availability of available workers, along with limited pricing power, may explain why wage growth has been modest. The so-called skills gap is front and center on Trump’s radar as he readies a plan to expand apprenticeship opportunities and build on years of labor-market progress.
The latest data from the Bureau of Labor Statistics show job openings climbed to an all-time high of 6.04 million in April, outpacing hiring by almost 1 million for the widest gap in records back to 2000. Unfilled positions jumped in the leisure and hospitality industry. The construction trade also saw an increase in openings, while manufacturing vacancies are near their post-recession high.
While the economy has been adding jobs at a decent clip for years, wage growth has been slower to mount. But there are signs that could be starting to change. Pay increased 2.5 percent in the first quarter from a year ago, matching the second-biggest gain since 2008, according to the Labor Department’s data on employment costs.
Where the Wage Growth Is (1Q YoY, private industry)
|+2.6%, matches biggest gain since 4Q 2008|
+2.5%, second-biggest advance since 1Q 2015
+2.7%, matches strongest gain since 4Q 2008
+3.6%, second-biggest increase since 3Q 2002
+2.2%, matches best gain since 3Q 2009
+4.6%, highest since 4Q 2007
+3.6%, third-strongest since 3Q 2002
What’s more, the share of smaller companies in May who raised compensation is close to a decade high because positions are hard to fill, National Federation of Independent Business figures show.
President Trump, who campaigned on reinserting the long-term unemployed into the workforce, on Wednesday will outline an initiative aimed at improving the Labor Department’s apprenticeship program, which allows those enrolled to earn a starting salary while participating in training and education. The program may appeal to both sides of the aisle on Capitol Hill in that it provides enhancement of skills desired by employers, and could help boost pay.
Apprenticeships could also reopen the door to more employment of America’s prime-age workers. One of the remaining areas of slack in the current labor market has been a decline in labor-force participation that started under President George W. Bush and picked up steam during President Barack Obama’s term.
“Americans want to work. American companies want to hire. The issue is a mismatch between available jobs and prospective employees’ job skills,” Labor Secretary Alexander Acosta said Monday at a White House press briefing.
— With assistance by Michelle Jamrisko