Job Openings Slow After Strong Summer

Summary

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Podcast Summary: WSJ Your Money Briefing

Episode: Job Openings Slow After Strong Summer
Date: October 7, 2020
Host: J.R. Whalen
Guest: Sarah Chaney, Wall Street Journal Economics Reporter

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Main Theme

This episode focuses on the slowdown in job openings following a hiring surge in the summer of 2020. The discussion explores which sectors are currently hiring, the nature of available jobs (high-wage vs. low-wage), and the correlation between hiring, business confidence, and overall consumer demand as the pandemic continues to affect the economy.

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Key Discussion Points and Insights

1. The Slowdown After Summer Recovery

• [00:35-01:39]
  J.R. Whalen sets the scene: Although the labor market showed signs of recovery over the summer, job openings are once again declining as hiring loses steam.
  • "The strength of the labor market is far from where it was before the pandemic, but over the summer it showed signs of recovery when employers ramped up hiring. Now that hiring spree is losing steam." (B at 00:35)
• [01:39-01:45]
  Sarah Chaney explains two key reasons for the slowdown:
  • The spike in hiring occurred when businesses reopened from lockdowns but has since waned as restrictions are lifted more slowly.
  • Employers initially tried to hold onto staff, hoping conditions would improve. Now, as revenues fall short, layoffs are happening.
• [01:45-03:10]
  The scale of the problem:
  • Job openings in August: 6.5 million
  • Number of unemployed people in August: 13.6 million
  • "There are a lot fewer job openings than there are jobless people, making it more difficult for people to quickly find work." (C at 02:44)

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2. Sector-Specific Trends

• [03:10-03:45]
  • Some sectors like restaurants and retail continue to struggle, but others, such as medical offices, show improvement.
  • Deferred dental visits are returning as offices reopen with new safety measures, supporting job opportunities and consumer confidence.
    • "People had kind of deferred their visits to the dental office and they're now able to go...there are new safety measures in place that probably help with consumer confidence." (C at 03:27)

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3. High-Wage vs. Low-Wage Job Openings

• [03:45-05:09]
  • Counterintuitively, while employment levels in high-wage jobs have held up better, job openings in these sectors are recovering more slowly compared to low-wage roles.
    • "In terms of job openings, the reverse has occurred. So high wage sectors have seen a slower recovery from their lows hit during the pandemic than lower wage sectors." (C at 03:55)
  • It costs more to hire/onboard higher-wage employees, and companies are cautious about their long-term outlook.
  • Sectors like technology and finance are adopting a "wait and see" approach to hiring.
  • Large cities are experiencing a slower rebound in job openings than smaller metro areas.
    • "Sectors like technology and finance, these higher wage sectors, have been taking more of a wait and see approach to hiring. And that is one reason that the recovery and job openings in larger cities has been slower..." (C at 04:42)

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4. The Link Between Consumer Demand and Hiring

• [05:09-05:38]
  • Hiring depends heavily on consumer spending; as consumer demand slows, so does job growth.
    • "Consumer demand for products is pretty key for a business to bring in revenues and then have that money to spend to employ workers." (C at 05:14)
  • The current weakening of consumer spending is contributing to a broader economic slowdown.

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5. The Importance of Addressing the Public Health Crisis

• [05:38-05:59]
  • Many economists argue that resolving the health crisis is essential for sustained job market recovery.
    • "Some economists are saying that we really need to solve the public health crisis before we start to see companies hire more workers, before consumers have the confidence to go out and spend like they did before the pandemic..." (C at 05:42)

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Notable Quotes & Memorable Moments

• "There are a lot fewer job openings than there are jobless people, making it more difficult for people to quickly find work." — Sarah Chaney (02:44)
• "High wage sectors have seen a slower recovery from their lows...companies in these higher wage sectors oftentimes make their hiring decisions based on longer term outlooks." — Sarah Chaney (03:55)
• "Consumer demand for products is pretty key for a business to bring in revenues and then have that money to spend to employ workers." — Sarah Chaney (05:14)
• "Some economists are saying that we really need to solve the public health crisis before we start to see companies hire more workers..." — Sarah Chaney (05:42)

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Timestamps for Important Segments

• 00:35 — Episode overview and summary of the labor market situation
• 01:39 — Initial reasons for the hiring slowdown
• 03:10 — Sector-specific labor market trends
• 03:45 — High-wage vs. low-wage job opening recovery
• 05:09 — Impact of consumer demand on hiring
• 05:38 — The need to resolve the public health crisis for economic and job recovery

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Tone and Language

The discussion is clear, fact-driven, and informative, aiming to provide concise, actionable insights for listeners tracking the U.S. job market’s recovery amid the ongoing pandemic.

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Transcript

[A]

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[B]

Here's your money briefing for Wednesday, October 7th. I'm J.R. whalen for the Wall Street Journal. The strength of the labor market is far from where it was before the pandemic, but over the summer it showed signs of recovery when employers ramped up hiring. Now that hiring spree is losing steam.

[C]

And so given just all of the uncertainty that a lot of businesses have right now, many of these companies are probably just holding off to see, you know, whether the economy is to more quickly improve.

[B]

Our economics reporter Sarah Chaney will explain which types of businesses are hiring and whether higher paying jobs are likely to return anytime soon. That's after the break. Over the summer, the number of job openings was gaining 5 to 7% a month, but in September they fell by 0.3%, according to Glassdoor. Our economics reporter Sarah Chaney has been going through the numbers and she's here to discuss her findings. Sarah, thanks for being here.

[C]

Thanks so much for having me.

[B]

JR so, you know, it seems like the hiring market has jammed on the brakes. What's behind the slowdown?

[C]

For one, you have the fact that there was an initial hiring spurt in late spring and early summer when many businesses that had been under complete lockdown were allowed to reopen. Since then, though, states have been lifting restrictions on businesses at a slower pace. And so naturally you'll have less hiring. And then another reason is just that a lot of employers at the beginning of the coronavirus crisis were holding on to workers thinking, you know, maybe things will get better. But at this point, they're seeing, hey, we're just not getting the revenues that we thought we would be getting. And so they're having to lay off workers. One of the main measures in that report is job openings. So just think, you know, if you're an unemployed person looking for a job and you go on a website like Glassdoor, indeed, you're going to see a job opening. So it's measuring basically that. And it showed that there were 6.5 million available jobs at the end of August. And you know, if you put that in context, there are, in August there were also about 13.6 million unemployed people. So there are a lot fewer job openings than there are jobless people, making it more difficult for people to quickly find work.

[B]

Now, we've read lots of reports about the restaurant and retail sectors not doing well, but some sectors are actually doing better than others.

[C]

At the beginning of the crisis, we saw that a lot of medical offices think, you know, you're your local dentist had to shut down, but when they were allowed to reopen, a lot of them did. And people had kind of deferred their visits to the dental office and they're now able to go. And there are new safety measures in place that probably help with consumer confidence.

[B]

Now, what do the job opening numbers tell us about higher paying jobs?

[C]

We have seen that employment in high wage positions has fared better than lower wage positions throughout the crisis. But in terms of job openings, the reverse has occurred. So high wage sectors have seen a slower recovery from their lows hit during the pandemic than lower wage sectors. And one reason that an economist from Job site indeed pointed to for this trend is just fact that it costs more to hire and onboard higher wage workers. And then also companies in these higher wage sectors oftentimes make their hiring decisions based on longer term outlooks. And so given just all of the uncertainty that a lot of businesses have right now, many of these companies are probably just holding off to see, you know, whether the economy is going to more quickly improve. So sectors like technology and finance, these higher wage sectors, have been taking more of a wait and see approach to hiring. And that is one reason that the recovery and job openings in larger cities has been slower than the rebound in smaller metro areas.

[B]

And for much of the business world, their hiring outlook is tied to consumers ability to spend.

[C]

So consumer demand for products is pretty key for a business to bring in revenues and then have that money to spend to employ workers. And what we've seen is that consumer spending has also slowed from earlier in the summer. And all of these factors just kind of point to a broader economic slowdown.

[B]

And I guess this really puts the spotlight on eradicating the health crisis.

[C]

Some economists are saying that we really need to solve the public health crisis before we start to see companies hire more workers, before consumers have the confidence to go out and spend like they did before the pandemic hit this spring.

[B]

All right, that's Wall Street Journal economics reporter Sarah Chaney. Sarah, thanks for coming on the show.

[C]

Thanks so much for having me.

[B]

And that's your money briefing. I'm J.R. whalen from for the Wall Street Journal.

[A]

This podcast is brought to you by reliaQuest. Cybercriminals are constantly attacking. They want your data. They want your identity. They want your innovation. RelioQuest fortifies your business with agentic defense AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now, and delivers insights to help them predict what's next. ReliaQuest agentic defense for the enterprise. Learn more at reliaquest.com that's R E L I A Q U E-S-T dot com.