MNI REALITY CHECK: US Hiring Seen Higher, But Capped by Supply

The pace of hiring jumped in September as holiday recruitment began and businesses brought on more staff in anticipation of high demand for goods and services and a return to in-person work, industry experts told MNI, but labor supply issues are still capping employment gains far below where firms would like them to be.

"We continue to see elevated demand for labor from employers," Indeed economist AnnElizabeth Konkel told MNI, and job postings on Indeed were up 45% through September from February 2020.

Openings in loading and stocking were up 88% compared to their pre-pandemic baseline, and postings for jobs in human resources were up 87%, she said.

FORWARD LOOKING

"That one is especially meaningful because it means that employers are anticipating not just hiring that one recruiter or one HR manager," she said. "They're probably anticipating that they might want to hire 10, 20, 30 more people, and they need that HR professional to be able to do that."

Job postings in child care were up nearly 50% in September compared to last February, Konkel said, reversing last month's dip in demand. That's likely an indication that in-person work is returning, she said, and many people being called back to the office "need those child care resources."

It's likely that the strong demand for labor seen through September will continue, she said, but elevated demand doesn't necessarily translate into elevated hiring, and many employers are still struggling to find both available and qualified workers for open positions.

One worrying sign in the Indeed data is that searches for seasonal work, which typically peaks in the fall, were down 39% in September compared to 2019, Konkel said, an indication that job seeker activity is down and those looking for work aren't interested in temporary, lower-paying jobs.

"We're just not able to fill lower paying jobs," said Mike Brady, an Express Employment Professionals franchise owner in Jacksonville, Fla.

Wages offered in the light industrial sector, which includes assembly and packaging, were up about 13% in September from last year, he said. Hourly wages typically increase 3%-5% year-over-year, he said.

TOP DOLLAR

Competitive employers need to offer between USD15 and USD20 an hour to attract "the best of the best," Brady said, nearly doubling Florida's USD10 minimum wage.

"The real challenge has been in some of the lower skilled, lower paying jobs, but it's also carried through to middle management," said Anthony Nieves, chair of the Institute for Supply Management's monthly services report - a concern also highlighted by Chicago Fed researcher Anna Paulson during an online MNI event.

Employers through the month, including himself, have offered incentives like one-time bonuses for new employees and current employees that are able to recruit workers, he said.

Total nonfarm payrolls are expected to increase 488,000 in September, according to Bloomberg, more than doubling August's disappointing 235,000 gain. That estimate sits toward the middle of economist projections, with forecasts on the lower end calling for a gain of 200,000 and forecasts on the upper end expecting an increase of 750,000. A St. Louis Fed analysis of high-frequency data from scheduling software company Homebase forecast a sharp decline of 818,000.

The unemployment rate should tick down by a tenth to 5.1% from 5.2%, according to Bloomberg, and participation should remain unchanged at 61.7%.