Openings, Hiring Slow Even Before Virus; Layoffs to Surge in March
The US Bureau of Labor Statistics’ monthly JOLTS report, released Tuesday morning, showed that job openings and hiring conditions slowed in February and layoffs rose, even before the full Covid impact.
Job openings fell to 6.882 million in February from 7.012 million in January, falling to 4.3% of total employment from 4.4%.
With the benefit of hindsight, it is interesting to note that job openings increased in the leisure and hospitality sector in February, ahead of the sharp March reduction in staff seen in the employment report last Friday.
Hiring fell to 5.896 million from 5.925 million, keeping the rate steady at 3.9%. Hiring in leisure and hospitality declined, but rose sharply in the retail sector.
Total separations, which includes terminations as well as layoffs and quits, fell to 5.560 million from 5.703 million.
Layoffs rose to 1.755 million in February from 1.741 million, while quits fell to 3.497 million from 3.574 million.
The March data will accelerate the trends seen in the February data.
First, layoffs will rise further, as reflected in both the March employment report and the weekly jobless claims data. Part of the Federal stimulus package was meant to discourage businesses from laying off workers, at least not permanently. But, nevertheless, most firms cut their staffs in March.
Quits, however, likely declined further, as workers that held onto their jobs at the start of the crisis were unlikely to leave on their own.
Job openings and hiring, of course, should pull back due to reluctance by businesses to expand due to the current uncertainty. When the crisis does end, the data may still not reflect an immediate improvement. Some firms may simply return laid off employees to their previous positions rather than advertise and hire new workers.