Job openings remain at record highs, with more than 10.1 million open positions in the U.S. Businesses are eager to capture market demand and are expanding headcount budgets to meet increasing wages and fill open roles, but still cannot hire employees quickly enough.
The main challenge ahead for the labor market will be disruption caused by the rapid increase of virus counts, as it threatens the near-term pace of job gains.
"Caution flags are flying," says Jay Denton, chief analyst for ThinkWhy, creators of talent intelligence software, LaborIQ. "If gains continue at this type of pace, it puts the U.S. economy in serious jeopardy a full recovery by late 2022 or early 2023."
The proprietary LaborIQ Index identifies and tracks 10 key performance indicators that best measure and rank a local economy's performance. These indicators or variables are present in every market and represent the greatest drivers of a market's economic progress or decline.
Top 5 Best-Performing U.S. Labor Markets, Reported by LaborIQ Index: August 2021
Dallas-Fort Worth-Arlington, TX
Phoenix-Mesa-Scottsdale, AZ
Austin-Round Rock, TX
Nashville-Davidson-Murfreesboro-Franklin, TN
Denver, Aurora-Lakewood, CO
Strong net migration has fueled the labor force and created demand for products and services. These metros have led the recapturing of lost jobs but even with rising populations, talent supply cannot keep up with demand, which in turn, is putting pressure on wage growth.
"The tank of talent supply will start to run empty for metros and industries in the first wave of the recovery. Look for some locations in the Southeast, Texas and Midwest to begin searching more frequently for talent outside their metro because as they become magnets for relocation," states Denton.
Nashville re-entered the top of the LaborIQ Index at number four, based on strong population growth which is fueling job creation. The Nashville area has been ranked in the top 10 for four consecutive months, as compared to number 46 a year ago.
Despite the pandemic, people and businesses were already on the move into the Dallas-Fort Worth and Austin areas, and with additional availability of talent, these metros have recovered jobs more quickly, ranking them at numbers 1 and 3, respectively, for overall performance.
Similar drivers have placed Phoenix in the number 2 spot, and Denver at number 5, with net migration and job growth accelerating recovery in these markets. ■