US job openings point to labor shortages in northern states

Many states have far more job openings than available labor as per the Job Openings and Labor Turnover Survey (JOLTS) state-level data from the Bureau of Labor Statistics (BLS). Northern US states in particular have a high ratio of job openings per number of unemployed led by North Dakota, South Dakota, Maryland, Vermont, and New Hampshire. These high ratios are indicative of a labor shortage with two or three times as many job openings for every unemployed person in the state. Not surprisingly, these states also have the lowest unemployment rates, all under 3%, yet most also have lower than average job growth rates.

What you will learn:

• Some states with high job-openings-to-unemployed ratios such as North Dakota, Nebraska, Maryland, and Vermont have seen low net in-migration, or in some cases, out-migration over the last three years which has exacerbated the imbalance between demand and supply for labor. The resulting labor shortages in these and other states likely constrained the growth in jobs.
• Even for states with low job openings to unemployed—California, New York, New Jersey, Washington, Nevada, Michigan, and Texas—the ratio is closer to 1.0, meaning the labor demand-supply is balanced. Moreover, all of these states (except California) saw job growth above the US average in 2023, and higher than many states with a high ratio of job openings per unemployed. From 2020 to 2023, Texas, Nevada, Washington, and New Jersey saw higher job growth rates than the US average. Most of these had the help of steady or high rates of in-migration.
• Paradoxically, Nevada had both the highest job growth rate in 2023 as well as the highest unemployment rate. It enjoyed high in-migration levels as well, suggesting that the in-migration helped fuel the job gains.