U.S. job openings increased less than expected in September while hiring fell, suggesting the labor market recovery was petering out even before a resurgence in new COVID-19 cases which is expected to slow momentum. Though the Labor Department’s monthly Job Openings and Labor Turnover Survey, or JOLTS report on Tuesday showed layoffs decreasing to their lowest level in nearly 20 years, there was more than one person competing for a single vacancy. The drop is at odds with significantly high weekly unemployment claims. The worst economic crisis since the Great Depression, marked by tens of millions of Americans on unemployment benefits, is one of the biggest challenges confronting President-elect Joe Biden when he takes over from President Trump next January. (Alos Read: US Economy Sheds 7 Lakh Jobs In March Amid Coronavirus Crisis )
“It’s hard to see any signs of backsliding, but there aren’t any signs of acceleration in the recovery either,” said Nick Bunker, director of research at Indeed Hiring Lab. “In a labor market with 10 million fewer jobs than February, we need to see hiring moving at a faster clip to avoid lasting damage.”
Job openings, a measure of labor demand, were up 84,000 to 6.4 million on the last day of September. Vacancies remained below their 7 million level in February. Economists polled by Reuters had forecast job openings rising to 6.5 million in September. Stocks on Wall Street were trading mostly lower. The dollar was steady against a basket of currencies. U.S. Treasuries fell.
The United States is setting daily records for coronavirus cases, which could force state and local governments to impose new restrictions on businesses like restaurants, bars, and gyms. Even without restrictions, consumers fearing exposure to respiratory illness are likely to stay away, which would hurt demand and hiring. At the same time, economic growth is slowing after a massive boost from fiscal stimulus, which has run out. The economy plunged into recession in February.
There were increases in job openings in financial activities, professional and business services, health care and social assistance, and leisure and hospitality industries. Federal government job openings decreased 20,000. The job openings rate was unchanged at 4.3 per cent in September.
“The virus count is hitting records however so it is questionable, given the new mini-lockdowns in many states, whether as many jobs will be required in the future at bars and restaurants, sporting events, museums and amusement parks,” said Chris Rupkey, chief economist at MUFG in New York.
STIFF COMPETITION FOR JOBS
Hiring declined 81,000 to 5.9 million, led by a 256,000 decrease in federal government as the 2020 Census winds down. Hiring also fell in retail trade and educational services. The hires rate dipped to 4.1 per cent from 4.2 per cent in August. The JOLTS report followed on the heels of news last Friday that the economy created 638,000 jobs in October, the smallest gain since the jobs recovery started in May. Employment remains 10.1 million jobs below its peak in February. Millions of people are experiencing long periods of unemployment.
The JOLTS report showed layoffs fell 200,000 to 1.3 million, the lowest level since December 2000. There were decreases in layoffs in the construction and wholesale trade industries. Despite the ebb in layoffs, the number of Americans filing claims for unemployment benefits has remained above its 665,000 peak during the 2007-09 Great Recession. At least 21.5 million people were receiving unemployment benefits in mid-October.
The layoffs rate fell to 0.9 per cent from 1.1 per cent in August. Even as layoffs moderated in September, job prospects for the 11.8 million estimated to be unemployed in September were rather bleak with only 6.4 million jobs available. “For every 18 workers who were officially counted as unemployed, there were only available jobs for 10 of them,” said Elise Gould, a senior economist at Economic Policy Institute in Washington. “That means, no matter what they did, there were no jobs for 5.4 million unemployed workers. And this misses the fact that many more weren’t counted among the unemployed.” The number of people voluntarily quitting their jobs increased 179,000 to 3.0 million. More people quit their jobs in construction, arts, entertainment and recreation as well as in other services.
The quits rate increased to 2.1 per cent from 2.0 per cent in August. The quits rate is viewed by policymakers and economists as a measure of job market confidence, but it has been distorted during this recession by people quitting to look after children or fearful of contracting COVID-19. The labor participation rate for women fell in April to levels last seen in the late 1980s and remains well below levels seen at the start of the year.
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