Historic-low layoffs, astronomical job openings, aggressive hiring, massive churn & job hopping: Weirdest labor market ever.
By Wolf Richter for WOLF STREET.
Reports of large-scale labor shortages in education, healthcare, transportation (airlines, good lordy!), and other segments rub elbows with reports of relatively small-scale layoffs in the most speculative segments of the economy – in the massively money-losing startup, SPAC, and IPO space. And there have been layoffs among mortgage lenders whose revenues plunged when demand for refi mortgages vanished and demand for purchase mortgages sagged due to spiking mortgage rates.
In July, the number of layoffs and discharges dipped for the second month in a row by a smidgen and remained in the record-low range in the data going back to the year 2000. The 1.398 million layoffs in July were down by 42,000 from July last year and down by 428,000, or by 23.5% from July 2019, according to the Job Openings and Labor Turnover Survey (JOLTS) released today by the Bureau of Labor Statistics, obtained from a survey of 21,000 employers.
This low number of layoffs confirms the trends in the weekly unemployment claims data, released last week by the Department of Labor. The 243,000 initial unemployment claims that were filed in that reporting week were up just a little from the historic lows earlier this year.
In other words, relatively few people got laid off, and most of them found new jobs quickly, or already had a new job lined up when they got laid off from the old job and never bothered to file for unemployment.
In the past, recessionary periods were preceded by unemployment claims rising past the 350,000 mark. Initial unemployment claims from the Labor Department last week:
Job openings increase further: the astronomical zone.
Job openings in July, not seasonally adjusted, jumped to the second highest ever, to 12.09 million openings, just behind the record in April, up by 482,000 openings year-over-year and up by 4.45 million openings, or by 61%, from July 2019.
Job openings seasonally adjusted jumped by 199,000 from June, to 11.24 million openings in July, up by 456,000 year-over-year and up by 4.1 million from July 2019.
This is not based on some online job postings or whatever, but on the JOLTS data that the Census Bureau collected from 21,000 employers (businesses and government entities) by asking about their workforce in July.
This is another sign that the labor market remains tight and that many employers are having difficulties filling positions:
“Quits” back off a tad, still very high.
The number of workers who voluntarily quit jobs in July declined for the fourth month in a row, to 4.18 million, but was still up by 15% from the already high levels in July 2019.
“Quits” is a sign that employees either already have what they think is a better job lined up, or that they’re confident that they can quickly get one. This large number of “quits” reflects job hopping by workers who are trying to arbitrage the tight labor market for their benefit, amid still aggressive hiring by companies. This creates large-scale churn in the labor force.
But the four months in a row of declines indicate that confidence in finding a better job, amid stories about layoffs and hiring freezes and what not, is maybe deflating just a tad:
Hiring still very strong.
Private sector employers hired 7.1 million workers in July, not seasonally adjusted, which includes the remaining burst of seasonal hiring that had started in May and June.
Seasonally adjusted, employers hired 5.98 million workers, a dip from the prior month, and down 2.7% from the hiring boom in July last year. Compared to July 2019, employers hired 370,000 more workers (+8.4%).
These are not all new jobs that have been filled, far from it. Many of these “hires” filled jobs that were left behind when workers quit to work somewhere else as part of the massive churn in the labor force:
Job openings in the largest industry categories.
Professional and business services: The number of job openings in July dipped from June to 2.09 million, but were still up by 8.0% from July last year, and in a sign of just how crazy this job market is, were up by 63.1% from the already high levels in July 2019:
Healthcare and social assistance: Job openings dipped to 1.98 million in July, in the same astronomical 2-million range since December last year. Year-over-year, openings were up by 15% and compared to July 2019, they were up by 65%, amid endless reports of shortages of doctors, nurses, and other staff at healthcare facilities.
Leisure and hospitality: Job openings ticked up a tad from June, to 1.52 million in July, up by 57% from July 2019. Restaurants and hotels have made a lot of progress in staffing up, after the spike in job openings that occurred when restaurants and hotels reopened. Year-over-year – so from what was still the re-opening spike last year – job openings dipped by 5.3%:
Retail trade: Job openings jumped in July to 970,000, but retailers have made progress in filling their spike in job openings that had occurred as the industry re-opened. Up by 16% from July 2019, retail job openings are reverting to normal-ish levels:
State & local government, mostly in education: Job openings jumped to 924,000 (seasonally adjusted), just a tad below the record in December 2021, and about the same as January, February, and April. Up by 52% from July 2019, amid endless reports of teacher shortages.
Manufacturing: Job openings, at 834,000 in July, remain in the astronomical zone, up by 92% from July 2019, but down some from the spike in April:
Construction: Job openings rose to 375,000 in July, up 11% year-over-year and up by 17% from July 2019:
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