Hiring Hit Record High in May as Layoffs Fell Sharply

A customer walks out of a U.S. Post Office branch under a banner advertising a job opening in Seattle on June 4, 2020. (AP Photo/Elaine Thompson)

(CN) — American employers hired a record 6.5 million workers in May and layoffs dropped to a pre-pandemic level as state economies began reopening.

A Labor Department report released Tuesday also shows that job openings rose to 5.4 million, a gain of about 400,000, after dropping by nearly a million the month before. But open jobs are still well below the nearly 7 million that were available before the coronavirus crisis.

The increase of 2.4 million hires compared to April was the largest monthly gain in hiring since the government began tracking the numbers in 2000, and 6.5 million hires is the most on record for a single month.  

Layoffs fell back to 1.8 million in May, the same level as February, after climbing to a record high of 11.5 million in March and staying quite high in April at 7.7 million.

But despite the drop, the 19.2 million layoffs in March and April outpace the roughly 10.5 million hires in April and May, when states started lifting restrictions aimed at slowing the spread of Covid-19.

Elise Gould, senior economist at the nonprofit think tank Economic Policy Institute, said layoffs could pick back up again soon.

“Unfortunately, more trouble is on the horizon as coronavirus cases continue to rise, states begin to re-shutter, and unemployed workers face further economic devastation when the unemployment insurance enhancements expire on July 25,” Gould wrote.

Based on unemployment averages from May and June, Gould said the ratio of jobless workers to open jobs is about 3.6 to 1.

“On average, there were 19.4 million unemployed workers while there were only 5.4 million job openings at the end of May,” she wrote. “This demonstrates tremendous continued slack in the labor market; for every 36 workers who were officially counted as unemployed, there were only available jobs for 10 of them.”

She said the economic recovery has “just begun to fill in the mammoth losses in March and April.”

“Without further aid to workers and their families as well as state and local governments, the economic pain will be with us for a very long time,” Gould said.

Tuesday’s report on job openings and labor turnover in May lags more recent economic data. The Labor Department reported last week that 4.8 million jobs were added back in June and the unemployment rate fell to 11.1%. There are still roughly 15 million fewer jobs than there were in February, before the coronavirus pandemic shut down the economy.

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