State of the Labor Market

April 2020 Job Openings and Labor Turnover Survey

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The labor market may have already hit bottom.

Today’s federal Job Openings and Labor Turnover Survey (JOLTS) report supports the notion that the labor market has probably already hit the bottom. Layoffs were still extremely elevated in April, but were lower than what we saw for March, particularly for directly affected sectors. We may continue to see elevated rates of layoffs and job cuts may continue to spread to other sectors, but the tidal wave of layoffs appears to be behind us.

Hiring dropped to a new all-time low of 3.5 million hires, which is roughly 60% of the average amount of hiring in 2019. But the outlook for hiring might be stronger than those numbers suggest. Job openings continue to hold up stronger than we might have expected. Employment has dropped to levels not seen in decades, but job openings are only back to 2014-era levels. Even openings in accommodation and food services, the industry sector most affected by the pandemic, was essentially flat over the month after dropping in March. 

Much like the May jobs report, the April data on layoffs and openings show a rebound. Progress may be good, but with 4.6 unemployed workers per job opening, the labor market has a lot more progress to make.

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