The layoff-hype wrung the sense of power out of workers they’d briefly enjoyed. But that’s about all that has happened.
By Wolf Richter for WOLF STREET.
There are always companies that let workers go for a variety of reasons. During the Good Times in the years before the pandemic, these layoffs and discharges averaged 1.8 million per month. That translated into about 1.3% of total employment that was axed every month for whatever reason as part of the normal way of business.
In June, layoffs and discharges declined to 1.53 million. The three-month moving average, which irons out the monthly ups and downs, declined to 1.55 million, the third month in a row of declines, well below the Good-Times average in the years before the pandemic of 1.8 million. In April, May, and June, the rate of layoffs and discharges was 1.0% of total employment. These are very low numbers, and they have come down from the spurt earlier this year.
During the Great Recession, monthly layoffs and discharges exceeded 2.5 million for four months in a row. In March 2020, there were 13 million layoffs and discharges; in April 2020, 9 million.
In early 2021, as companies tried to rehire, labor shortages cropped up, and workers quit in large numbers to take better jobs somewhere else – which was called the Great Resignation – and companies hired furiously, and wages rose at the fastest pace in 40 years. Layoffs and discharges plunged to historic lows, below 1.4 million in May 2021 and stayed in that range for a year.
But in mid-2022, mass layoffs started to be announced with huge fanfare in the media and took on momentum late 2022 and into early 2023.
Layoffs and discharges started ticking up in mid-2022, off the historic lows, and continued rising during the year and into 2023, and in March 2023 hit 1.84 million. The whole over-heated labor market was expected to unravel or whatever. Then it got kind of quiet. And layoffs and discharges have dropped since then.
This data is based on surveys of about 21,000 employment sites, the results of which were released today by the Bureau of Labor Statistics as part of its Job Openings and Labor Turnover Survey (JOLTS). This is not based on the layoff hype in the media.
And we have seen this play out with big companies: They made their global mass-layoff announcements last year and earlier this year – with many of the jobs not even being in the US – and all this was hyped endlessly in the media, and then over the past few months, it got quiet, as the big companies have continued to hire.
Alphabet, for example, had added 54,933 fulltime employees during the immense hiring boom in 2021 and 2022, increasing its headcount by 41%. Then in January 2023, it announced that it would lay off 12,000 people – even as it continued to hire. By June 30, its fulltime workforce had dropped by 8,913 employees from the end of December. But compared to June 2022, its fulltime workforce, despite the layoffs, was still up by 7,784 employees. And most of the laid-off workers found work quickly with other companies. It was all part of the big churn. I discussed this entire phenomenon here.
But all this layoff-hype and the actual layoffs did have the effect that workers got scared, and they hung on to their jobs, and they quit quitting; and that was the end of the Great Resignation, during which people went chasing after higher pay and better jobs on the other side of the fence.
Voluntary quits fell to 3.86 million (three-month moving average) in June, the lowest since May 2021, but still above the Good Times average in 2019 of 3.5 million:
So we can see the psychological impact these layoff announcements and the layoffs themselves have had: They wrung the sense of power out of the workers they’d briefly enjoyed during the labor shortages. And so, wage increases too cooled a little. And some companies shed some of the excess workers they’d hired during the hiring boom. And there was a lot of churn, with people cycling through different jobs. But that’s about all that has really happened. And the layoffs and discharges have since then fizzled.
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This did not age well. Yellow Freight? CVS?
Hang on to your hat. There’ s a bailout in the works.
No, there is no ‘bailout’ at all in the works.
LOL. What does it say in the article? During the good times, 1.8 million layoffs and discharges per month. In June, 1.55 million. Those 5,000 CVS layoffs are not even a rounding error in the 1.55 million.
There are ALWAYS layoffs and discharges, and some goofballs cannot get a handle on it?
There are 156 million employees in the US. During the best of times, like right now, layoffs and discharges are about 1% per month of the total, or about 1.55 million. Before the pandemic, about 1.3% of the total employees got axed every month.
BTW, most of the Yellow drivers will switch companies. The freight doesn’t go away. It still needs drivers and trucks to get delivered, no matter which trucking company is doing the work.
Yellow has been a bankruptcy waiting to happen for many years. Without bailout, it would have happened in 2020. They couldn’t even make money during the biggest trucking boom ever.
Yellow could have some impact – how many of those lost jobs (IIRC, ~22K union, ~8K non-union) will be regained as union?
But, yes, at the moment Yellow is a blip in the big picture, even for the Teamsters.
I believe all of us should be looking at the disability claims…just a thought
I Scott,
The number of people with a disability in the labor force (working or looking for a job) and the number of employed people with a disability is at record highs.
Bloggers look at this BLS data and think those are people claiming disability benefits. And then they publish all kinds of BS (lots of braindead bloggers out there). Nope, those are people “with a disability” in the workforce and working.
The shift to working from home has greatly benefited people with a disability:
Truck driving is a tough job. Drivers with good and even mediocre records can always get another driving job. Many will welcome a layoff and rocking for a while.
I must admit, I’ve been called worse. Goofball is almost a compliment. I always enjoy your website.
I salute you sir!
Kudos to you Greg Hamilton, for responding with maturity and civility.
There are so many that come to Wolf Street, and in society in general nowadays, that have closed minds and short fuses. The world of instant out/rage.
None of us are as smart as we think we are. We should come here to learn, to exchange ideas, and to consider the insights of others with open minds … with just a hint of an occasional rant.
We are privileged to be here. Goofballs one and all.
Thanks for showing us the real numbers Wolf! It is too easy to buy into hype without the real numbers.
i am real curious about employment by different categories – industries and wage level. i wonder if strength in some areas is offsetting weakness in others?
Labor hoarding is easily paid for with ongoing price gouging.
Everyone is willing to pay $8 for a 1/2 pint of ice cream or buy a $600k second home
You can only be gouged if you voluntarily pay the price on a non essential.
As Wolf has said 743378853.6 times, a buyer’s strike would do wonders bringing down the price on many things……
Discipline in America? Ha!
Which of the following is less likely to happen?
a) American consumers spend less
b) Chinese consumers spend more (on something other than property)
Tough call.
PS – “Buyers strikes” rarely happen when there are entrenched expectations of long-term inflation.
So far no consumer strike so I vote for China first .
Behavior for the baby boomers is still all clear to spend in retirement stock markets all time highs. And 5 percent on savings !
.6? It’s not nice to cut someone off!
Hear hear! Vote with your wallet!
There’s no question that the conventional wisdom regarding “price elasticity” has been well and truly shown the door.
No one I know will pay $128/gallon for ice cream.
$3.25/gallon at Aldi’s here in Florida. And we have the highest inflation rates in the nation.
…have the impression (scanning the ice cream selection at our backwater Guerneville Safeway) that pricing, in its own frozen-dairy way, resembles nothing so much as that of wine…
may we all find a better day.
You can get a feel for the labor market by the number of views you attract on LinkedIn. Activity post pandemic has been strong, generally, but I noticed an uptick the past few months. Companies are hiring.
Loving the new higher for longer. This could drag on for years! Mucho interest me likey.
Why are you salivating over a 1% real return on a ST investment? That’s a negative yield after tax.
Have some dignity.
Because any real return is better than a 60% haircut when this bubble bursts. Lived through 2000 and 2008 and it’s the same mentality out there. Will profit handsomely for the third time while others earn their degree in reality.
It sure seems similar to the past, but in this case a housing bubble mashed up with a stock bubble with political risk thrown in for good measure.
“higher for longer” will shortly give way to “negative forever”.
Just watch.
Keep dreaming. The past 15 years were an anomaly that cannot be repeated. If you’re basing your retirement on that being the future scenario I feel sorry for you and your family.
You’re dreaming.
Compassionate Capitalism – companies feel sorry to trim the non performing staff
Revenge Retention – the stockpiling of non productive employees and depriving competitors from hiring and affecting their relative competitiveness
Environmentally Conscious Talent Management – companies retain and compost their deadwood instead of diverting them to the job market
Office Space Zombies – retain employees to justify occupying large, impressive trophy office buildings
People are obsolete.
It shouldn’t be that hard for AI to figure out how to replace CEOs, senators, and Supreme Court justices. The people who develop AI are already training them to do their jobs, presumably to make time for recreation and entertainment. I would not kid you about such a thing.
I suppose the people who make snarky comments on economics websites could also be replaced.
No., People are what make the world function.
some 10% ‘workforce’ unemployable
yet they still hire and fire at will
those with skills just keep rising
I caught the Y2K contracting bug for 8 years
wonderful, gainful experience
worked for some good companies and many who need to fire entire executive suite
I didn’t care – best 2 days – day hire and day walked off work floor
paid in CASH
This will just create its own market. When the bland lead the blind down the overly manicured path toward total homogeneity, we will see humanness become the ultimate nostalgia item. Anything of sentient origin will be reserved as a strictly boutique indulgence for the very same moneyed smart-but-dumb psychopathic technocrats who killed it all off in the first place.
I’m going to go read Walden again.
Future Shock
Brave New World
The Cold Equations/The Darfstellar/The Time Machine
may we all find a better day.
AI could also be trained to read the comments.
Revenge….
I worked for a big corporation that decided to appoint an ex-GE type as CEO. Good times or bad the GE system he incorporated dictated that roughly 10% of the (engineering) population be tagged as underperformers and be denied raises, bonuses, promotions and too often a job. Yeah and Wall St worshipped the ground this guy’s mentor (squeaky voiced Neutron Jack) walked upon.
The problem (with pretty much everybody) is that their preferred methods work only when they work… and not so much when they don’t. GE was the premier company in America in the 1980s and 90s. Fifteen lines of business as I recall and they were number one or two in every single one of them. EVERYBODY wanted to work for them if they could.
Pretty easy to impose a ten percent mandatory cut rule when you KNOW you can replace the bottom ten percent with higher quality people.
The problem is that managers who grew up in that system thinking it will work when they try to transplant it somewhere else.
Employee evaluations have about the same objectivity as dog shows. With an unrelenting 10% quota for abusing employees who are left after a few years? The legitimate stars and all the consummate (boot licking) politicians. No way to run a company and the gratuitous cruelty doesn’t go un-noticed. Good luck hiring quality people once the word gets out.
Ah, the era of “Six Sigma”. I remember it well.
Oh and of course I forgot to mention. Any and all employees with gray hair were of course under-performers. Goes without saying, doesn’t it?
I went to Lab Corp this morning for annual blood draw and my Phlebotomist told me that the company had to close 20 locations around Colorado for the lack of available labor. There is a new restaurant in our prestigious Southlands Aurora shopping complex called Waldo’s chicken and beer has some great selections and decent prices for the food quality, but I’m betting the biz will be closed due the employee training and retention. Your business has a line out the door and drive thru is packed, but you have employees telling customers “I don’t know”. I never seen so many retirees stocking shelves and literally running every department in my local Walmart and Sam’s. Infant mortality will be the death of a lot small businesses and restaurants, the quantity and quality of people willing to work, learn, and execute at a high level is just not there. A lot companies are pushing rope uphill, front line management burnt out, while the troops are surfing tic tock and watching the time clock.
Good companies, large or small, are all about management and capitalization. Right now you absolutely have to take the time (and spend the money) to educate and motivate staff. That means management on the floor looking workers in the eye. We have some chain restaurants around here going south quickly because the owner lives two states away. They refuse to pay anything more than minimum wage and and extra $2/hour for supervisors. Drove by a local Popeye’s yesterday and 5 employees were “on break” smoking pot while no one was manning the store.
If only there was a way to attract scarce workers.. what do people do when a product is scarce and they need more.. oh yeah they pay more!
The forgotten skill in an overdeveloped society: motivation.
What affect will the Fitch downgrade of the USA credit rating have on treasury yields?
You’re on the wrong article. This is the one, and it answers your question:
https://wolfstreet.com/2023/08/01/fitch-downgrades-us-credit-rating-on-fiscal-deterioration-government-debt-burden-and-debt-ceiling-standoffs/
i didn’t see any of your AI bots on the waves this morning. none on the pull-up bars in the gym. maybe they’re out on the trail with their mountain bikes? i’ll let you know if i see any.
of course if the only world you call home is Zucks fake virtual one then yeh i guess you could be obsolete. and that fake virtual beach front property was never yours anyway. just like that virtual job that never mattered.
The real root of the problem is “job creation.” Right now there are a purported plethora of jobs waiting to be filled, but yet there are no products missing, Jerome Powell says the supply chains are just fine. He ought to know as he did quantitative easing for 2 years of 120 billion dollars a month so that every remote, lonely gas station minimart could have a full grave shift of minimum wage part time workers.
A worthy article that factually cronicles the flimsy employment data. No doubt there is a message in the bones. I just don’t see it.
I think the Bard may have said it best, so far :
All the world’s a stage,
And all the men and women merely players;
They have their exits and their entrances;
And one man in his time plays many parts,
His acts being seven ages. At first the infant,
Mewling and puking in the nurse’s arms;
And then the whining school-boy, with his satchel
And shining morning face, creeping like snail
Unwillingly to school. And then the lover,
Sighing like furnace, with a woeful ballad
Made to his mistress’ eyebrow. Then a soldier,
Full of strange oaths, and bearded like the pard,
Jealous in honour, sudden and quick in quarrel,
Seeking the bubble reputation
Even in the cannon’s mouth. And then the justice,
In fair round belly with good capon lin’d,
With eyes severe and beard of formal cut,
Full of wise saws and modern instances;
And so he plays his part. The sixth age shifts
Into the lean and slipper’d pantaloon,
With spectacles on nose and pouch on side;
His youthful hose, well sav’d, a world too wide
For his shrunk shank; and his big manly voice,
Turning again toward childish treble, pipes
And whistles in his sound. Last scene of all,
That ends this strange eventful history,
Is second childishness and mere oblivion;
Sans teeth, sans eyes, sans taste, sans everything.
Organized labor is currently, not the brightest bulb in the tool box unless I consider alternative scenarios like self enrichment. I’m pretty sure one can catch up with the national labor leaders at the exclusive country club, teeing off with their corporate buddies.
If my ankle was twisted, I would probably admit that I was raised an FDR democrat. A data point that falls into the category of anti-social as judged by the democracy corporations from the Social Democracy of California. Surveillance and labeling individuals is big business.
By an untouchable elite that have been taught that preservation of their wealth is the most important thing. The ones that are selected to lead.
America is America because we have a history that promoted personal consumption expenditures as the principle driver of innovation and productivity which was a wise decision.
Based on the painful experiences of our shared history, beginning with our revolt against the English aristocracy.
To me, the lack of correlation between growth of GDP and productivity is an obvious result of the extreme monetarism that supplanted the former era of common sense.
dang – what i find interesting is that often the same people who are worried about the environment and climate change are the ones who are the most rabid consumers of things they really dont need.
for my part, i’m a less is more person. buy what you need, pay for good stuff and just dont buy what you dont need. keep things until you absolutely wear them out (clothes, cars).
but i have a friend who buys everything and I seem to be borrowing stuff from him alot (mainly tools), so maybe i’m just lucky.
You have no constitutionally guaranteed right to privacy.
/**/
“surveillance and labelling of individuals”….. absolutely! Not to mention categorization…Thats capitalism at work. Thats big data at work.
If you were trying to make money off people wouldn’t it be an advantage to have a big database of every detail for every single person so that you could predict what you could sell them and what they would need and want?
Or Control your employees, Or wage war against them. Or do whatever you feel like with your big data set.
If you are a capitalist, you would see nothing wrong with that scenario.
/**/
Its high time to fix the constitution.
Ccat
As Adam Smith wrote,
” People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices…. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies, much less to render them necessary.”
The conversation ends in a conspiracy against the public. The law should do nothing to facilitate such assemblies.
“…oh! My daughter! Oh! My ducats!…”
may we all find a better day.
The layoff black swan has gone south. Rumor has it the swan is living at a small pond in the Villages in Florida. All it has done so far is an occasional flap of the wings to tease the media. It is otherwise quiet.
This surprising resiliency of the job market (in the face of ongoing interest rate hikes) is one of the reasons the residential real estate market continues to have inflated prices. As Wolf has pointed out, the low interest rate loans from the past few years removed both buyers and sellers from the current RE market.
Those who received such loans will not sell/move unless they must – and that will typically require a black swan event. In this case, the swan is job loss. And that has not happened thus far. I continue to think that has taken Powell by surprise. So further interest rate hikes are likely.
seems to me that government spending at all levels – fed, state, local and monetary policy is propping the whole thing up. maybe i’m wrong and the tech economy is so strong that nothing matters.
we will see.
With the entire baby boom cohort aging out of the employment market should anyone really be surprised that finding new employees isn’t so easy? Add in young peoples’ dim view of getting off their asses and putting their nose to the grindstone and you have the complete picture. Generous unemployment and rent forgiveness during the covid scare sure didn’t help the situation.
‘…but I learned by prior example that, in this game, being noseless is for suckers…’.
may we all find a better day.
Cat Ballou?
…great guess! (a grandnephew, actually…).
may we all find a better day.
A strong job market removes any excuse that the Fed might have to ease up on the inflation fight.
The fascinating question going into the fall, is wondering if labor hoarding will influence inventory levels. As an example, if you’re a retailer, do you maintain your current staff and bet the farm on blowout Christmas sales, or do you hedge a bit, contemplating a scenario where excess labor costs and weak sales place you in a position of weakness, post holiday season? As disposable income is apparently weakening going into Fall, and a handful of fools still pretending a recession is imminent— do you bet the farm, or become cautious?
I don’t know about all of this. I did a Deep Dive job search this past weekend and I have to say that there were a LOT fewer openings than when I did the same search six months ago.
The company I used to work for has changed it’s position on rehiring retirees. Forever, it was verboten to even consider such a thing…. then they did multiple VSP’s and ended up with a severe case of brain drain. However, due to the issues with the pension plan and certain legal issues associated with that combo, those returning retirees were taken back as contract workers… so the job disappeared but it wasn’t filled in the traditional way.
Also: It was not uncommon to leave jobs posted that you had no interest in filling – even if some of those jobs were done away with – because, if you did remove the post, you lost the headcount. Trying to get re-authorization for a headcount – which would be considered a *new* headcount – required a signature from the president / CEO of the company – which wasn’t going to happen. So you left it there to rot.
However, if you had to reduce headcount for budgetary reasons, rather than offing one of your loyal peeps, you could sacrifice your useless headcount and get your winkie button for being a team player.
In other words, job postings don’t mean squat. If they’re fresh (not aged to perfection – look at the posting date), then maybe they’re real. Or someone just moved the headcount to a different job description to play hide the weenie with HR and/or the big cheese.
VSP… Voluntary Separation Program/Package… those are usually pretty good deals for just the reason you lay out here.
I was offered one to leave Active Duty in 1995 but decided to wait until 1996… by which time the Navy figured out that it let too many junior officers leave so they yanked the program. It was basically one year’s salary.
Meanwhile a friend of mine took the VSP in 1995… but he still joined the reserves like I did. We both retired in the same ceremony in in 2016. So although he has to repay the year of LIEUTENANT’S PAY that he took… he retired as a COMMANDER from the Reserves so it will take him all of about nine months. Needless to say, his finances have looked a lot more secure than mine over the past quarter century… and maybe the NEXT quarter century!