More Mixed Signals for Labor Market
The latest Job Openings and Labor Turnover Survey from the Bureau of Labor Statistics shows the total number of job openings in the economy rose to 6.652 million in October, up from 6.494 million in September. The number of open positions in the private sector rose to 5.950 million in October (see top of first chart). Private-sector openings have snapped back sharply since the low of 4.332 million in April at the height of government-imposed lockdowns. The private-sector job-openings rate, openings divided by the sum of jobs and openings, was 4.7 percent, up from 4.6 percent in September and a low of 3.8 percent in April.
At the same time, the number of layoffs rose to 1.680 million in October with the number of private sector layoffs increasing to 1.459 million (see first chart). Increases in both openings and layoffs suggest there are strong crosswinds for the jobs market, with some sectors continuing to recover while others struggle. Furthermore, with Covid-19 cases surging, new restrictions on consumers and businesses represent significant threats to continued recovery.
From the worker perspective, the number of quits (regarded as a measure of confidence in the labor market) was essentially unchanged in October, coming in at 3.092 million versus 3.074 million in September. For the private sector, quits were 2.917 million, down from 2.92 in the previous month. Both results are below the pre-pandemic levels (see first chart).
The industries with the largest number of openings were education and health care (1.358 million), professional and business services (1.252 million), and trade, transportation, and utilities (1.102 million). The highest openings rates were in professional and business services (5.8 percent), leisure and hospitality (5.6 percent), and education and health care (5.5 percent).
Overall, the data relating to the labor market paint a mixed picture of recovery from the massive damage of nationwide lockdowns. With new restrictions on the rise, the outlook for the economy remains highly uncertain.
Robert Hughes
Robert Hughes joined AIER in 2013 following more than 25 years in economic and financial markets research on Wall Street. Bob was formerly the head of Global Equity Strategy for Brown Brothers Harriman, where he developed equity investment strategy combining top-down macro analysis with bottom-up fundamentals. Prior to BBH, Bob was a Senior Equity Strategist for State Street Global Markets, Senior Economic Strategist with Prudential Equity Group and Senior Economist and Financial Markets Analyst for Citicorp Investment Services. Bob has a MA in economics from Fordham University and a BS in business from Lehigh University.
