Hires hit one-month record high while layoffs see new low, JOLTS report shows – CNBC

Waiters set up tables in front of a restaurant on a street on the first day of the phase two re-opening of businesses following the outbreak of the coronavirus disease in New York, on June 22, 2020.

Carlo Allegri | Reuters

Hirings showed their biggest monthly gain ever and separations posted their largest drop as Americans started going back to work in May, the Labor Department reported Tuesday.

Employment vacancies also shot up, rising 8% amid reopenings from the coronavirus shutdowns, thanks largely to a jump in the hospitality industry, according to the closely watched Job Openings and Labor Turnover Survey. Though it runs a month behind the more widely publicized nonfarm payrolls reading, the JOLTS report is a favorite gauge of Federal Reserve policymakers.

Openings totaled just shy of 5.4 million for the month, up from 5 million in April. Hirings surged to 6.5 million from the 4.05 million in April, and separations plunged nearly 60% to 4.14 million. The layoffs rate tumbled from 5.9% in April down to 1.4%.

The numbers help quantify the extent to which the jobs market repaired itself after an abrupt March shutdown that saw 11.5 million layoffs and discharges that month and nearly 10 million more in April due to social distancing and stay-at-home requirements brought on by the pandemic.

The quits rate, seen as a gauge of worker confidence, increased to 1.6% from 1.3% in April, though it was still well below the 2.4% level from a year ago.

Even with the jump in hiring, May ended with 21 million unemployed workers, or nearly four for every job opening. 

“The millions of job openings don’t match up well with the millions of workers on furlough waiting to be called back to their jobs,” said Chris Rupkey, chief financial economist at MUFG Union Bank.

The battered leisure and hospitality industry benefited most from the May activity.

The sector in total saw 1.34 million hires, a 175% increase from April as most of the industry remained in shutdown. Most of those hires came in accommodation and food services, which added 1.22 million compared with just 460,000 the previous month.

Job openings in the sector also popped, going from 314,000 in April to 547,000 in May.

Education and health services also saw a large hiring increase, nearly doubling to 1.04 million.

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