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Job openings in Alabama unchanged in April, separations down

Recent reports from the Bureau of Labor Statistics show the Alabama labor market remains tight, even as unemployment ticked up.

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On Monday, the Bureau of Labor Statistics released its latest report on job openings and turnover in Alabama during the month of April.

The BLS estimated that there were 120,000 job openings in Alabama, a number unchanged since March. However, this is a significant decrease year-over-year since April 2023, when there were 145,000 job openings in the state.

But due to the number of job openings, Alabama was one of 34 states in April with a ratio of unemployed people per job openings below the national average of 0.8, with only 0.6 unemployed people per job opening.

The BLS explains that “ratios less than 1.0 signal tighter labor markets in which firms have more job openings than there are people looking for work.”

The BLS’ report also found that while the number of hires in April decreased slightly month-over-month (from 90,000 to 86,000), the number of layoffs decreased significantly. The number of layoffs and discharges in Alabama decreased by more than a quarter between March and April, going from 29,000 to 21,000. However, the number of quits also increased by 1,000 during the same time period.

Another BLS report released on Tuesday found that Alabama’s unemployment rate in May was 3 percent, a point below the national average of 4 percent.

While the Alabama unemployment rate has increased 0.7 percentage points since May 2023, the total employment in Alabama increased 2.2 percent during the same time period, from 2.158 million to 2.205 million.

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The U.S. Chamber of Commerce, a national organization that represents the interests of business, characterizes the latest news from the BLS as evidence of a national labor shortage.

Stephanie Ferguson, the director of the Chamber of Commerce’s Global Employment Policy & Special Initiatives, writes that “a strong jobs market is good news, but many of those job openings are going unfilled because the U.S. does not have enough workers to fill them.”

However, Preston Mui of Employ America has pointed out that the vacancy-to-unemployment ratio is now “just under its level in May 2019.” Additionally, a tight labor market is widely seen as good news for American workers.

Real wages, or wages adjusted for inflation, have risen significantly in recent months, with an average increase of “0.8 percent for the 12 months ending March 2024.” These gains have also been concentrated primarily in low skill, traditionally low pay occupations.

For example, a June report from the Alabama Department of Labor found that between May 2023 and May 2024, average hourly earnings in leisure and hospitality increased by 4.9 percent, compared to an average 2.5 percent increase for all private jobs.

The state of the labor market going forward will depend heavily on whether the Federal Reserve decides to raise interest rates, keep them at their current level, or begin to cut them.

Mui writes that present wage trends don’t show much danger of exacerbating inflation and “there isn’t that much more room for the labor market to cool without falling short of full employment.”

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Chance Phillips is a reporting intern at the Alabama Political Reporter. You can reach him at [email protected].

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