By Eric Morath 

Low-skilled jobs are becoming increasingly difficult for employers to fill.

The number of unfilled jobs in the U.S. grew by 1.02 million at the end of October from a year earlier, the Labor Department said Monday. More than a third of those new openings were in two fields typically packed with entry-level positions: accommodation and food service and retail.

That suggests steady hiring elsewhere in the economy and unemployment holding at a near half-century low is allowing those who might otherwise seek jobs at restaurants or stores to look for higher-paying jobs in other industries.

There were a seasonally adjusted 7.08 million job openings on the last business day of October. That's up from the prior month, but down from August's record high of 7.29 million. Openings exceeded the unemployed -- people without a job but actively seeking work -- by one million in October. Before March, job openings had never exceeded the number of unemployed workers in more than 17 years of monthly records.

Of the one million additional open jobs in the year ended in October, 200,000 were in accommodation and food service, the largest increase of any sector tracked. There were 1.04 million jobs available in the field at the end of October. Retail openings grew by 147,000 to 800,000 at the end of October.

"Many people who might otherwise look at those sectors are finding better alternatives in industries they view as more secure with better room for advancement" such as office and medical jobs, said Julia Pollak, labor economist at employment site ZipRecruiter. She said the number of applicants per retail job opening on ZipRecruiter have fallen from 3 to 1 to 1 to 1 over the past year.

With the unemployment rate holding 3.7% at since September, there are few available workers for employers to draw upon. That's caused businesses to increasingly look to workers with existing jobs to fill openings.

Employers in the lowest-paying fields, including retail, have had to change their strategy, said Josh Wright, chief economist at iCIMS Inc., a maker of employee-recruiting software. The average hourly pay for a nonsupervisor retail worker was $16.08 an hour in October, versus $22.88 an hour for all nonsupervisors in the private sector.

"There's an arms race to bring in people," Mr. Wright said. "Retailers are hiring sooner in the cycle and increasingly investing in training. They're dropping their standards and then training hires to allow them to be more productive employees."

Openings also rose in the fast-growing health-care sector, increasing by 160,000 from a year earlier to 1.19 million at the end of October. The number of openings in manufacturing rose by 112,000 to a record-high of 522,000.

Increased demand for manufacturing workers shows that escalating trade tensions and the rising value of the dollar -- two factors thought to hurt domestic factories -- weren't yet having much impact on staffing demand, Mr. Wright said.

Monday's report also showed total job separations edged down slightly in October.

During the month, 3.51 million Americans voluntarily quit their jobs, down from 3.56 million in September. It was the second straight month quits have decreased. Job quitting is seen by economists as proxy for workers' confidence in the labor market. The rate at which workers quit edged lower from the highest level since 2001 the prior two months. Slightly fewer quits came despite historically low unemployment.

Still, the rate of workers quitting their jobs is up from the prior year's pace, and remains at a historically high level.

Layoffs and other involuntary discharges fell very slightly in October to 1.69 million from 1.71 million in September. That runs counter to the trend shown in weekly applications for unemployment benefits. That proxy for layoffs edged higher by the end of October after touching a 49-year low in September.

Write to Eric Morath at eric.morath@wsj.com

(END) Dow Jones Newswires

December 10, 2018 14:43 ET (19:43 GMT)

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