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Economy in Brief

U.S. JOLTS: The Job Market Shuts Down in April
by Tom Moeller  June 9, 2020

• Job openings fall sharply.

• Hiring continued to disappear.

• Layoffs remained elevated and quits fall.

The Bureau of Labor Statistics reported that the total job openings rate eased to 3.7% during April from 3.8% in March and 4.4% in February. Coronavirus-related closures of companies pushed it to the lowest level since January 2017. The openings rate is calculated as job openings as a percent of total employment plus jobs that have not yet been filled. These figures remained below the 4.8% record in January 2019. The hiring rate plummeted in April to a record low of 2.7% from 3.4%. The overall layoff and discharge rate eased to 5.9% after spiking to a record of 7.6% in March, following a mere 1.2% in February. The quits rate plunged to 1.4% from 1.8% in March and 2.3% in February. It was the lowest rate since April 2011. These figures date back to December 2000.

As of the last business day of April, the job openings level tumbled to 5.046 million, down by 30.7% y/y. The job openings level fell 40.5% y/y in the construction sector and by roughly one-third y/y in manufacturing. It fell by roughly one-half y/y in leisure & hospitality and by one-quarter in the professional & business service sector. In government, the number of job openings declined 13.3% y/

The private-sector job openings rate held steady m/m at 3.9%, down from the record rate of 5.1% reached in January 2019. The construction sector's job openings rate improved m/m to 3.7%, but compared to 5.4% at its peak twelve months ago. The rate in manufacturing edged higher m/m to 2.6%, but was down versus 3.6% one year earlier. The rate in leisure & hospitality rose to 4.9% after collapsing to 3.9% in March, but the rate fell precipitously in professional & business services to 4.4% from 5.3%. The government sector job openings rate fell to 2.9% and was below the February record of 3.3%.

In April, the level of hiring fell 41.3% y/y to 3.524 million with the hiring rate drastically lower at 2.7%. Private sector hiring declined 41.2% y/y and government hiring plunged by a like amount y/y. Hiring in the factory sector fell 15.0% while leisure & hospitality hiring fell nearly three-quarters y/y. Professional & business service sector hiring fell 45.4% y/y and education & health services hiring fell 29.5% y/y.

Data on separations reflect a combination of layoffs and quits. The total separations rate eased to 7.5% from the record 9.7% in March, but the level of separations increased by roughly three-quarters y/y. The surge in the level of separations was driven by the private sector. The rate was 23.3% in leisure & hospitality, down modestly m/m but up from 6.1% in February. Professional & business realized a lessened 6.4% rate after surging to a record 8.0% in March. The separations rate in education & health services eased m/m to 6.5% but remained up from its low of 2.8% in February.

The layoff & discharge rate in the private sector eased to 6.9% after jumping to 8.8% in March but it jumped to 1.0% in government, up from a record low of 0.3% in December. The record rate of 10.4% in construction compared to a record 5.1% in manufacturing. The 4.4% rate in the information sector was double the March level and a record. It compared to a record 3.0% in finance. The professional & business services layoff & discharge rate eased to 4.1% after jumping to a record 5.1%.

The quits rate plunged to the 2011 low of 1.4%. The sharply lower private sector quits rate of 1.5% compared to a lessened 0.7% in government. The level of job quits in the private sector fell one-half y/y and by roughly one-quarter y/y in government. In manufacturing, the level of job quits declined 55.3% y/y and dropped 59.0% y/y in finance. The number of quits in professional & business services declined 47.2% y/y and fell 65.8% y/y in leisure & hospitality.

The Job Openings and Labor Turnover Survey (JOLTS) dates to December 2000; the figures are available in Haver's USECON database.

JOLTS (Job Openings & Labor Turnover Survey, SA) Apr Mar Feb Apr'19 Apr'18 Apr'17
Job Openings, Total
 Rate (%) 3.7 3.8 4.4 4.6 4.5 4.0
 Total (000s) 5,046 6,011 7,004 7,284 6,985 6,142
Hires, Total
 Rate (%)  2.7 3.4 3.8 4.0 3.8 3.6
 Total (000s) 3,524 5,111 5,864 6,000 5,587 5,265
Layoffs & Discharges, Total
 Rate (%) 5.9 7.6 1.2 1.3 1.2 1.2
 Total (000s) 7,716 11,489 1,846 1,950 1,729 1,704
Quits, Total
 Rate (%) 1.4 1.8 2.3 2.3 2.3 2.1
 Total (000s) 1,786 2,789 3,436 3,492 3,373 3,034
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