JOLTS – February 2020: Latest Report on Job Openings Shows the Calm Before the Unemployment Storm
Click through the tabs above for a deep dive into this month’s JOLTS report.
Data Visualizations: Drew Stanley
– – –
The federal government’s latest report on job openings showed little movement in February 2020. But the March 2020 report, scheduled to be released May 15, will undoubtedly reflect the harsh economic reality created by the coronavirus pandemic.
The U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS) report for February, released April 7, indicates the number of job openings held fairly steady at nearly 6.9 million. That was up from around 7 million in January 2020 and February 2019.
Likewise, hires and separations (including layoffs and firings) saw little movement, at nearly 5.9 million and almost 5.6 million, respectively. Hires in January 2020 were slightly over 5.9 million, while hires in February 2019 were around 5.7 million. Separations in both January 2020 and February 2019 were around 5.7 million.
The February numbers fail to take into account the economic shakeup triggered by the coronavirus pandemic.
On April 9, the U.S. Labor Department reported that in the week ending April 4, first-time unemployment claims totaled 6.6 million, on top of the nearly 6.9 million during the previous week. Just over 3.3 million first-time claims were filed for the week ending March 21, pushing the three-week tally close to 17 million.
Put another way, 10% of American workers lost their jobs in a three-week span.
Labor Secretary Eugene Scalia says the April 9 report “continues to reflect the purposeful sacrifice being made by America’s workers and their families to slow the spread of the coronavirus.”
Millions of business across the country have temporarily or permanent closed in response to social-distancing guidelines or outright mandates, leading to widespread layoffs and furloughs.
On April 3, the Labor Department said employment outside farming fell by 701,000 jobs in March, with the jobless rate rising to 4.4%. The February unemployment rate stood at 3.5%.
Gregory Daco, chief U.S. economist of Oxford Economics, expects a total of 22 million job losses by May before the coronavirus outbreak lets up and the economy begins to revive, according to USA Today. The Federal Reserve Bank of St. Louis envisions as many as 47 million layoffs and a whopping 32% jobless rate. JPMorgan anticipates the unemployment rate will climb to 20% this month.
The leisure and hospitality sector — which has been battered by coronavirus-imposed shutdowns of hotels and restaurants — accounted for 459,000 of the lost jobs in March. Forecasts suggest millions of workers in the U.S. hotel and restaurant industries have lost or will lose their jobs, at least temporarily, due to the coronavirus pandemic.
In March, the number of unemployed people who reported being temporarily laid off more than doubled to 1.8 million, the Labor Department says, while the number of people reporting permanent job losses increased by 177,000 to 1.5 million.
“Once the economy restarts, the staggering unemployment will linger for months or even years,” warned Greg McBride, chief financial analyst at Bankrate.com.
In a March 20-26 survey of 254 U.S. companies, outplacement and executive coaching firm Challenger Gray & Christmas Inc. found that 11% had carried out permanent layoffs, 7% had instituted temporary layoffs and 49% were likely to do layoffs within the next three months. Meanwhile, 14% of the companies had furloughed employees and 37% were likely to do so within the next three months.
By definition, a furlough is temporary layoff, with furloughed employees continuing to receive health insurance and other benefits, and those employees eventually returning to their jobs. Meanwhile, a layoff typically refers to an employee permanently losing his or her job; however, some layoffs are temporary. After a layoff, a worker usually must be rehired.
Andrew Challenger, the firm’s senior vice president, says it’s “clear companies across the country are instituting very real and difficult cuts. Employers are wary of letting their workers go right now after fighting so hard to find and retain them during one of the tightest labor markets in recent history.”
On the other end of the spectrum, 47% of the companies surveyed said they were interviewing for open positions and another 10% were hiring for critical positions. Among companies that are currently onboarding, nearly 10% reported postponing or revoking offers until the pandemic subsides.
On another promising note, JPMorgan economists “continue to see a second-half recovery, based on the assumption that disruptions from the pandemic fade by June,” according to CNBC.