U.S. Labor Market Losing Speed As COVID-19 Spirals Out Of Control

WASHINGTON: U.S. job openings fell moderately in November, but mounting layoffs amid rampant COVID-19 infections supported views that the labor market recovery from the pandemic was stalling.

The Job Openings and Labor Turnover Survey, or JOLTS report from the Labor Department on Tuesday followed on the heels of news last Friday that the economy shed workers in December for the first time in eight months. The slowing labor market and a worsening public health crisis could pressure the incoming Biden administration to deliver a bigger relief package.

Joe Biden will take over from President Donald Trump next Wednesday. The government approved nearly $900 billion in additional fiscal stimulus in late December after months of haggling, causing a delay that has also been blamed for the labor market’s struggles.

“The labor market started softening even before the latest virus shutdowns,” said Joel Naroff, chief economist at Naroff Economics in Holland, Pennsylvania.

Job openings, a measure of labor demand, dropped 105,000 to 6.527 million on the last day of November. Though vacancies have decreased from as high as 7.012 million in January, they remain more than double levels seen during the 2007-09 Great Recession.

There were 1.6 unemployed workers for every vacancy in November. Job openings declined in manufacturing, information and educational service sectors. But there were more unfilled jobs in the retail sector. The job openings rate fell to 4.4% from 4.5% in October.

Layoffs increased 295,000 to nearly 2.0 million in November and were mostly in the West. That lifted the layoffs rate to 1.4% from 1.2% in October. Job cuts were led by the accommodation and food services industry, which shed 263,000 workers. Out-of-control coronavirus infections have led to wide-spread curbs on businesses, with restaurants and bars bearing the brunt of the restrictions.

There were 42,000 job losses in the healthcare and social assistance sector. State and local governments, which are experiencing tight budgets because of the pandemic, laid off 21,000 workers.

“Stripping out the wild monthly swings of the coronavirus recession, the rise in layoff activity is historically large and surpasses the increases seen at the height of the Great Recession,” said Lydia Boussour, a senior U.S. economist at Oxford Economics in New York.

U.S. financial markets were little moved by the JOLTS data.

SLOW RECOVERY

A separate report showed a sharp decline in confidence among small businesses in December. Economists, however, cautioned against reading too much into the plunge in sentiment reported by the National Federation of Independent Business, which they said largely reflected Republican Trump’s electoral loss to Democrat Biden.

“Respondents to the NFIB survey tend to favor Republicans,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “The NFIB survey overestimates growth under Republicans and underestimates it for Democrats.”

In November, hiring rose 67,000 to 5.979 million. Hiring increased in the professional and business services, and mining and logging industries. It fell in accommodation and food services, other services and information sectors. The hiring rate was steady at 4.2%.

The economy shed 140,000 jobs in December, the first decline in nonfarm payrolls since April, after adding 336,000 positions in November. The economy has recovered 12.4 million of the 22.2 million jobs lost in March and April.

The JOLTS report showed the number of people voluntarily quitting their jobs was steady at 3.156 million, though 64,000 workers quit in the accommodation and food services industries. Many people in the prime-age group, mostly women, have quit jobs to look after children or because they are fearful of contracting COVID-19.

The quits rate was unchanged at 2.2% in November.

“With hiring and job openings at these levels, the economy is facing a long, slow recovery without additional action from Congress,” said Elise Gould, a senior economist at the Economic Policy Institute in Washington.

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