Layoffs in the United States jumped to a record high in March, while the number of people voluntarily quitting their jobs dropped to a 4-1/2-year low as the novel coronavirus crisis rapidly changed labor market dynamics.
The Labor Department said on Friday in its monthly Job Openings and Labor Turnover Survey, or JOLTS, that layoffs and discharges increased 9.5 million in March to 11.4 million, the highest since the government started tracking the series in 2000.
In just over a month, the labor market has shifted from one of worker shortages to the worst since the Great Depression.
Nonessential businesses shuttered in mid-March in the fight to slow the spread of COVID-19, the respiratory illness caused by the coronavirus. Though many are gradually reopening, economists predict it would take years for the labor market and the broader economy to heal. The government reported last Friday that the economy lost a staggering 20.5 million jobs in April, the deepest plunge in payrolls since the Great Depression.
"Latest JOLTS data further illustrates the catastrophic COVID-19 labor market," said Elise Gould, a senior economist at the Economic Policy Institute in Washington.
The Labor Department's Bureau of Labor Statistics (BLS), which compiles the report said data collection was affected by the coronavirus pandemic. The BLS said it modified the JOLTS estimates for March to better reflect the impact of the virus.
Layoffs and discharges were led by the accommodation and food services industry, with 4.1 million workers getting pink slips. In the retail sector, 908,000 workers lost their jobs.
The layoffs and discharge rate surged to a record 7.5% in March from 1.2% in February.
The number of people voluntarily quitting their jobs dropped 654,000 to 2.78 million, the lowest since September 2015. The quits rates, which is viewed by policymakers and economists as a measure of job market confidence, dropped to 1.8%. That was the lowest since December 2014 and was down from 2.3% in February.
The government also reported that job openings, a measure of labor demand, dropped 813,000 to 6.19 million on the last business day of March. That was the lowest since May 2017. Vacancies peaked at 7.52 million in January 2019.
The drop in job openings was led by sharp declines in vacancies in the accommodation and food services industry and manufacturing. The job openings rate fell to 3.9% in March from 4.4% in February.
Hiring decreased 658,000 to 5.2 million in March. The hiring rate fell to 3.4% from 3.8% in February.
"While some jobs will be recouped as the economy recovers, we expect the employment shortfall to persist into 2021," said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics in New York.
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