It is the end of the year and many companies are completing employee evaluations and planning for new positions for 2017. So, now is a good time for a quick look at labor market statistics for an idea of where we might be headed in the new year.
The national unemployment rate now stands at 4.6 percent as of November 2016, and this low rate takes us back to 2008 pre-recession levels. It has been a long recovery and, over the past 6 years, the economy has added more than 15 million jobs for an average monthly gain of 180,000 new jobs, measured from the bottom of the job market in January 2010. Following lower unemployment rates, the cost of new hires is rising. Average hourly earnings also have increased, recording a 2.3 percent compound annual growth rate from January 2010. In the past 12 months through November, earnings are 2.5 percent higher. In short, there are fewer unemployed people looking for work and higher wages are needed to attract and retain them.
Within the wholesale trade industry, the Bureau of Labor Statistics Job Openings and Labor Turnover Survey, also known as “JOLTS,” provides some useful labor market benchmark data. Since mid-year 2015, the total number of job openings in wholesale trade has consistently grown faster than the ability of companies to recruit new hires. As of October 2016, the total number of job openings stood at 174,000 while new hires were 132,00, leaving 42,000 open positions across the industry. This comes as no big surprise for any beer distributor who has tried to hire and retain employees this year.
Continued strengthening of the labor market is evident in the increase in voluntary separations, also called the quit rate. As the job market gets hotter, more employees are more confident to quit existing jobs. For example, near the end of 2010, roughly 31,000 people voluntarily left their jobs each month. That number has more than doubled and now stands at 72,000 for October 2016. The gap between “openings” and “hires” appears to be growing. The good news is that for 2016 year-to-date, the number of voluntary quits (employee separations) has remained relatively stable, averaging around 80,000 per month for the year. While the total number of quits may seem high, the reality is that the quit rate for wholesale trade is almost half of the national rate. In October 2016, the wholesale trade quit rate was 1.2 percent while the national rate stood at 2.1 percent. A significantly lower quit rate in the wholesale trade is evidence of the quality jobs, higher wages and benefits the industry provides employees.
So, while 2017 may prove challenging for hiring and retaining employees for many in the industry, beer wholesalers and the wholesale trade sector will continue to lead the country with stable and reliable employment for millions of men and women.