1.4 million more jobs than unemployed, but the gap is closed

Jobs fell in June as the labor market continued to tighten, the Labor Department reported on Tuesday.

Vacancies fell to 7.35 million from 7.38 million in May, according to vacancies and employment survey. The JOLTS report is closely followed by policy makers in the Federal Reserve as a measure for slack in the labor market.

The change in positions opened the gap between vacancies and those considered unemployed at 1.37 million, a reduction of 123,000 from May. Unemployed people are defined as those who are out of work who have looked for a job and are available for hire. Vacancies in trade, transport and utilities were 1[ads1].4 million, while education and health services and professional and business services were close behind with around 1.3 million each.

The amount of terminations, considered as an indicator of labor market mobility since it measures employees who voluntarily quit their jobs, fell by 55,000 to 3.43 million. As a result, the closing rate among the total employees remained unchanged at 2.3%, where it has remained throughout the year.

With the unemployment rate of 3.7% in July, questions still remain as to how close the United States is to full employment. The huge gap between jobs and unemployed suggests more room for movement, given a skills gap between what employers want and what the job market offers.

For 22-year-old Andre Bezo, the offer of a job training program like putting him on the IT staff at Stanford University was enough to make him quit the community college for a while since he was given a practical opportunity to pursue his career.

Bezo, from San Mateo, California, was working fast-food restaurant when a former manager told him about the program, known as the Year Up Bay Area, which serves low-income youth without college. He now works in a Level 1 position at Stanford's Service Desk.

"The sudden transition has been motivating and reigniting my passion to better myself," he said.

At a time when students were swimming in $ 1.5 trillion debt, the chance to learn advanced skills and get paid for the appealed to Bezo, who lives at home and helps support the family .

"The perspective today is really changing because everyone is wondering if college is necessary to be the one to jump off the platform for your professional career," he said. "The job market is there, there are vacancies. There are people who are looking for new, young talent who may be able to motivate themselves."

It's not just job seekers that are changing. Employers also adapt to the changing dynamics of the labor market.

Job training has become a priority as companies have taken on hiring workers who may not have the skills available but who are able to adapt and learn.

The skills gap also helps keep wage growth down. Average hourly wages rose by 3.2% year-on-year in July, around the best levels of recovery, but still a rather tepid affair.

Another dynamic in relation to disputed pay gains at play is that new employees do not focus so much on pay.

"Wages are becoming less and less a priority for candidates," said Irina Novoselsky, CEO of the CareerBuilder employment site. "As a result, they don't push too much. They ask more about benefits, what the brand stands for, who their boss is. Over 60% change jobs because of their boss, and they're willing to take a pay cut."

There are wage gains, Novoselsky said, but they happen primarily at the extremes of the scale – either at the lower or higher ends, but not much in the middle.

"We continue to see really high turnover," she said. "The candidates continue to shop around. It only adds to the pressure on the tight labor market."