Everyone Is Trying to Hire Factory and Construction Workers
American businesses are looking for workers at an impressive scale–especially to fill blue-collar jobs.
The Department of Labor said that there were 7.6 million vacant positions that employers were looking to fill at the end of May, a bit higher than in April and the highest number of openings since May of 2024. This was the second consecutive month of rising openings.
Economists had expected a decline to 7.3 million, expecting that an economic drag from high gas prices and uncertainty about the war with Iran would weigh on hiring intentions. Both consumers and businesses appear to have largely looked past those concerns, likely correctly assessing that the acute phase of the conflict—and the higher energy costs that accompanied it—would be short-lived.
We’ve seen a significant reversal of the trend in openings. Six months ago, openings hit a post-pandemic low of 6.55 million, having mostly declined since the peak of 12.3 million in March of 2022. But since that December low, job openings have been mainly rising.
The rebound in manufacturing openings has been particularly strong. The post-pandemic peak of manufacturing openings came in April of 2022, when it hit around one million. After trending down over the next three or so years, these hit a low of 376,000 in April of last year. For the next six months, openings bounced around around that level, rising to just 389,000 in November. Since then, however, openings have been mostly rising, hitting 529,000 in May. That is the highest number of openings since May of 2024.
Openings are Historically High
By historical standards—meaning, pre-pandemic—overall job openings are high. Indeed, the May number matched the pre-pandemic all-time high hit in November 2018. (The Labor Department’s Job Openings and Labor Turnover Survey’s data only goes back to December 2000.) For manufacturing, the most recent openings figure actually exceeds the pre-pandemic record of 520,000 in November 2018.
Openings in construction rose for the third month in a row to 298,000. While openings were higher in the post-pandemic period, this is a very high level by pre-pandemic standards. For the period from 2000 through 2019, construction openings averaged around 151,000. And this isn’t an artifact of the housing bubble bursting. Even prior to the financial crisis and the subsequent slump, construction openings averaged well below current levels.
The quits rate for manufacturing rose to 1.4 percent in May. This is not particularly high by post-pandemic standards or by the standards of the first Trump administration. But it is much higher than what prevailed during the Obama years and slightly above the average during the two terms of George W. Bush. Since quits are a proxy for worker confidence in the strength of demand for labor, this suggests that American factory workers increasingly see themselves in a good position with respect to their employers.
While the number of hires and the hiring rate are not particularly impressive, it’s important to view this through the lens of the growth rate of the labor force. Thanks to immigration enforcement, labor force growth has seriously diminished. As a result, there are fewer workers available to hire. So a low hiring level does not mean it is difficult to get a job. It means it is difficult for employers to fill a job, which is usually a recipe for improving wages, increased capital investment, and growing productivity.
Sssh…Don’t Tell Anyone the Labor Market is Booming
Unfortunately, the strength of the labor market appears to be a closely guarded secret. The financial press barely mentions it or actually denies it altogether. “Job openings rise to 2-year high, but good luck actually getting on,” a headline on Marketwatch bizarrely announced on Monday. Even the Trump administration’s officials do not seem—for reasons we do not quite understand—all that eager to promote the jobs boom we’ve seen for the last three months. And the most recent consumer confidence survey found that 22.5 percent of consumers say jobs are hard to get right now—the highest percentage since January 2021.
Later this week, we’ll get the employment situation report. It’s coming on a rare “Jobs Thursday” because of the Independence Day holiday. The consensus is for 114,000 jobs and an unemployment rate of 4.3 percent. But after three straight months of better than expected reports and the upside surprise in job openings, that’s likely an underestimate.
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