The Scoop on Job Openings

The Bureau of Labor Statistics reported some interesting results on the number of job openings nationwide.

Here’s another positive for the economy, and most real estate sectors: on Wednesday, the Bureau of Labor Statistics reported that the number of job openings nationwide again rose, to 5.8 million as of the last business day of July, up 22 percent over the year. That’s as high as this particular metric, which has been published since 2000, has ever gone. Significantly, it means that employers are looking for employees in greater numbers than at any time since the economy crawled out of the recession; that they’re relatively optimistic about the state of the economy; and (maybe) that they’ll be willing to pay more for the employees they have to keep them.

Moreover, jobs openings are fairly widespread, both geographically and in employment sectors. For instance, several industries experienced a rise in openings in July: professional and business services (up 122,000 positions), accommodation and food services (up 82,000), retail trade (up 77,000), and nondurable goods manufacturing (up 27,000).

Employer optimism, if it’s sustained, is directly good for office space leasing, since adding people eventually requires more space (though with open-plan offices and other squeezing down of office space, that’s a slower process than it used to be). Retail benefits indirectly as the demand for workers intensifies and pay (maybe) goes up, and workers spend just a little bit more, because they can. Apartment leasing benefits as workers with either new jobs or improved incomes form new households, or move up to better apartments.

Employee optimism is also important. The quits rate is a key metric in that regard. According to the BLS, the rate has been 1.9 percent for the fourth month in a row, but that’s also 6 percent higher than a year earlier. Quits are generally voluntary separations initiated by the employee, so it’s partly a measurement of workers’ willingness or ability to leave jobs, either because they’re able to get something else, or they strongly believe they’ll be able to get a job. (Only “partly” because not everyone who quits, such as retirees and students, aims to get another job.) There were 2.7 million quits in July, little changed from June. Still, the number of quits has been increasing overall since the end of the recession, drifting between 2.7 million and 2.8 million for the past year or so.