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State of the Labor Market

August 2020 Job Openings and Labor Turnover Survey

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After a few months of being surprisingly strong, job openings have slowed down.

While labor demand held up more than we may have expected early in the recovery, that pace is not guaranteed to continue, according to the latest numbers from the government Job Openings and Labor Turnover Survey (JOLTS). For unemployed workers permanently separated from their jobs, the prospects of finding a new one may dim.

The good news is that layoffs and discharges hit a historic low in August. For a recession and recovery characterized by lots of churn, this is remarkable, to say the least. Whether this trend holds up in the future is uncertain, as there have been reports of major employers planning large-scale layoffs.

The ratio of unemployed workers to job openings rose, particularly for workers who have been permanently separated from their job. We know from the Jobs Report that the number of permanent unemployed workers continues to rise. My fear is that whatever is causing permanent unemployment to go up could pull down labor demand and job openings. The result would be a gloomier outlook for the labor market.