JOLTS – July

The BLS Job Openings and Labor Turnover Survey (JOLTS) data come out with a lag, so we are now just getting a look at the July numbers. They do, however, help fill in some of the labor dynamics that are occurring within the economy as we adjust to the COVID-19 pandemic shock.

We know that at the peak of that shock a total of over 22 million workers were unemployed, and subsequently slightly over 10 million of those have been re-employed. The following chart shows the relationship between the number of unemployed and job openings (through August for the unemployed and through July for job openings).

(Click on image to enlarge)

There was a brief period earlier this year when the unemployment rate was at a historic low of 3.5% and the number of job openings actually exceeded the number of unemployed people. But that picture quickly changed due to the pandemic.

As shown in the following chart, the rate of separations (the monthly change divided by total employment) increased from slightly under 4% prior relative to the crisis to a peaking of 9.7% before dropping back to 3.6% in July. Similarly, the rate of hires came back from a low of 3.1% in April to climb to 5.4% in June before dropping back to 4.1% in July. The JOLTS report also includes detailed breakdowns by industry. The highest rates of separation in July occurred in Arts, Entertainment, and Recreation (7.4%) and Accommodations and Food Services (6.3%). Interestingly, those same two industries also reported the highest hire rates, at 10.9% and 9.1%, suggesting a lot of disruption. The only other category with a separation rate above 5% was Professional and Business Services (5.1%), which saw a hires rate of 5.7%.

(Click on image to enlarge)

A similar pattern is shown by the rate that employees have quit their jobs versus the rate that they have been laid off. Layoffs peaked in March and dropped to 1.2% in July, while quits fell to 1.4% in April when COVID-19 had its worst impact on the economy and then recovered to 2.1% in July. The industry most affected in terms of layoffs was Arts, Entertainment, and Recreation (5.2%). The only other category above 2.8% was Construction. The highest quit rate was for Accommodations and Food Services (4.3%), with the next highest being Retail Trade (3.8%).

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Disclaimer: The preceding was provided by Cumberland Advisors, Home Office: One Sarasota Tower, 2 N. Tamiami Trail, Suite 303, Sarasota, FL 34236; New Jersey Office: 614 Landis Ave, Vineland, NJ ...

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