The continued surge in job openings and elevated quits rate in July suggest that labour shortages are still intensifying, which will put further upward pressure on wages. (See Chart 1.) There is little evidence that the return to in-person schooling or the expiry of Federal UI benefits this week will do much to alleviate those shortages. Instead, virus fears appear to be a bigger factor, with the surge in infections over recent months causing more potential workers to remain on the sidelines.
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