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Layoffs & discharges as share of payrolls remain historically low: But the immense pandemic-era churn in the labor market has slowed.
By Wolf Richter for WOLF STREET.
The number of workers who were hired by the private sector in April jumped by 160,000 from March, to 5.21 million hires, the most in a year, seasonally adjusted. The low point was in June 2024 (blue line in the chart).
The three-month average, which irons out the month-to-month squiggles and revisions, jumped by 72,000 in April from March, to 5.10 million private-sector hires, the highest in 11 months. So far this year, the trend is clearly up (red line in the chart).
Most of these 5.21 million hires in April replaced workers who’d quit their jobs or who were discharged or laid off for whatever reasons. Only a small portion were hired to fill new jobs. For example, nonfarm payrolls rose by 177,000 in April, the new jobs that got filled.
This data from today’s Job Openings and Labor Turnover Survey (JOLTS) by the Bureau of Labor Statistics is based on surveys of about 21,000 work locations.
Job openings in the private sector rose by 202,000 in April from March, to 6.54 million, seasonally adjusted, and are at the high end of the pre-pandemic Good Times.
The three-month average declined by 105,000 openings in April to 6.49 million, just a hair above where it had been in August, and at the high end of the range in 2018 and 2019, testifying to a strong labor market, but the excesses of the labor shortages in 2021-2023 have been worked off.
Job openings at all levels of government fell by 14,000 to 847,000.
Most of these job openings came about because workers quit their jobs, or were discharged or were laid off. Only a small portion of these openings represent newly created jobs.
This JOLTS data of job openings are not based on online job postings (fake or otherwise), but on surveys of about 21,000 private-sector and government work locations.
Quits in the private sector fell by 148,000 workers in April from March, to 3.01 million.
These are people who voluntarily quit their jobs such as to take a better job somewhere else. They do not include retirements, deaths, etc.
A high rate of quits means workers are confident and are aggressively pursuing better opportunities elsewhere. Quits are below pre-pandemic levels, as employers succeeded in scaring their employees by announcing mass-layoffs starting in mid-2022, a strategy with which they successfully calmed down the enormous churn in their workforce during the pandemic when employees quit jobs in huge numbers, and employers were forced to pay much higher wages to retain workers or hire new workers to fill the jobs left behind by quitting employees.
This churn was expensive and reduced productivity, and employers began to reassert their power in mid-2022 with layoff announcements, which stopped the quits-pandemic in its tracks, and therefore reduced job openings, and hiring needed to fill those job openings.
Layoffs and discharges – excluding retirements, deaths, etc. – in the private sector bounced back from the drop in March, to 1.71 million.
The three-month average ticked up to 1.63 million. They remain at the low end of the pre-pandemic range.
These are workers who got fired with or without cause – a common feature of the US labor market – and workers who got laid off for economic reasons. But it does not include retirements and deaths, which are in the category of “other separations.” And it does not include people who quit voluntarily to take a better job elsewhere, who are included in “quits.”
Employment has risen over the past decades, and so seen within these growing payrolls, layoffs and discharges as a percent of total payrolls are historically low:
What we’re seeing here in the “Labor Turnover” data from JOLTS (Job Openings and Labor Turnover Survey) is that the immense churn in the labor market during the pandemic has slowed to what we can consider healthy levels.
During the pandemic, the labor market had gone haywire. But now the number of quits has come down, so there are fewer job openings left behind that need to be filled, and less hiring – and poaching employees from other companies – to fill them. And layoffs and discharges as a percent of total payrolls remain historically low, though they have risen some as employers feel freer to let some people go. And the churn has calmed down a lot, that’s what we’re seeing here.
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The post Hiring in the Private Sector Surges, Despite All Moaning & Groaning about the Economy or Whatever appeared first on Energy News Beat.
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