Research >> Economics
Job Openings increased to 5.4 million in May
The number of hires increased by 2.4 million to a series high of 6.5 million in May, the U.S. Bureau of Labor Statistics reported today. This was the largest monthly increase of hires since the series began. Total separations decreased by 5.8 million to 4.1 million, the single largest decrease since the series began. Within separations, the quits rate rose to 1.6 percent while the layoffs and discharges rate fell to 1.4 percent. Job openings increased to 5.4 million on the last business day of May. These improvements in the labor market reflected a limited resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic and efforts to contain it. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector, by industry, and by four geographic regions.
On the last business day of May, the number of job openings increased to 5.4 million (+401,000) while the rate was little changed at 3.9 percent. Job openings rose in accommodation and food services (+196,000), retail trade (+147,000), and construction (+118,000). Job openings decreased in information (-55,000), federal government (-37,000), and educational services (-27,000). The number of job openings increased in the South region.
In May, the number of hires increased to 6.5 million (+2,440,000) and the rate increased to 4.9 percent, a high for both series. Conversely, hires levels and rates saw series lows in April. In May, the hires level increased for total private (+2,432,000) and was little changed for government. Hires increased in a number of industries, with the greatest rise in accommodation and food services (+763,000), followed by health care and social assistance (+479,000), and construction (+427,000). The number of hires increased in all four regions.
Total separations includes quits, layoffs and discharges, and other separations. Total separations is referred to as turnover. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations includes separations due to retirement, death, disability, and transfers to other locations of the same firm.
In May, the number and rate of total separations decreased to 4.1 million (-5,830,000) and 3.1 percent, respectively. The number of total separations in May was 1.5 million lower than the February level. Total separations decreased in many industries in May, with the largest decreases in accommodation and food services (-1,159,000), retail trade (-751,000), and other services (-704,000). The number of total separations increased in federal government (+28,000). Total separations decreased in all four regions.
In May, the number and rate of quits increased to 2.1 million (+190,000) and 1.6 percent, respectively. Quits rose to 2.0 million (+228,000) for total private and fell to 108,000 (-38,000) for government. Quits increased in accommodation and food services (+88,000), durable goods manufacturing (+38,000), and transportation, warehousing, and utilities (+27,000). Quits decreased in state and local government education (-26,000), state and local government, excluding education (-25,000), and educational services (-22,000). The number of quits increased in the South region.
The number and rate of layoffs and discharges decreased in May to 1.8 million (-5,912,000) and 1.4 percent, respectively. The rate, which had reached a series high of 7.6 percent in March, is now much closer to the pre-pandemic rate of 1.2 percent in February. The number of layoffs and discharges decreased for total private to 1.7 million (-5,809,000) and for government to 124,000 (-103,000). The layoffs and discharges level decreased in all but one industry. The largest declines occurred in accommodation and food services (-1,251,000), followed by retail trade (-758,000), and other services (-698,000). Layoffs and discharges increased in federal government (+16,000). The number of layoffs and discharges decreased in all four regions.
The number of other separations decreased in May (-108,000). Other separations decreased in professional and business services (-50,000), construction (-30,000), and state and local government, excluding education (-9,000). Other separations decreased in the Midwest region.
Net Change in Employment
Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. When the number of hires exceeds the number of separations, employment rises, even if the hires level is steady or declining. Conversely, when the number of hires is less than the number of separations, employment declines, even if the hires level is steady or rising.
Over the 12 months ending in May, hires totaled 68.5 million and separations totaled 79.8 million, yielding a net employment loss of 11.3 million. These totals include workers who may have been hired and separated more than once during the year.
Posted: July 7, 2020 Tuesday 10:00 AM