Hires hit record high in one month while layoffs set new record

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Hires registered their largest monthly advance and departures registered their largest decrease when the Americans started to return to work in May, the Labor Department reported on Tuesday.Job vacancies also increased, increasing 8% as part of the reopening of coronavirus closings, thanks in large part to a jump in the hotel industry, according to a close survey of job vacancies and the job turnover rate. Although it is a month behind the most widely distributed non-farm payroll reading, the JOLTS report is a favorite gauge for Federal Reserve policymakers.

Openings totaled just under 5.4 million for the month, up from 5 million in April. Hires jumped to 6.5 million from 4.05 million in April, and separations plunged nearly 60% to 4.14 million. The layoff rate fell from 5.9% in April to 1.4%.

The numbers help quantify the extent to which the labor market has repaired itself after a brutal closure in March which saw 11.5 million layoffs and layoffs this month and nearly 10 million more in April due social distancing and the demands of staying at home caused by the pandemic.

The dropout rate, considered an indicator of workers’ confidence, rose to 1.6% from 1.3% in April, although it is still well below the 2.4% level compared to one year ago.

Despite the jump in hirings, May ended with 21 million unemployed, nearly four for each job opening.

“The millions of job vacancies don’t match the millions of workers on leave waiting to be called back,” said Chris Rupkey, chief financial economist at MUFG Union Bank.

The struggling leisure and hotel industry benefited the most from May’s activity.

The sector recorded a total of 1.34 million hirings, an increase of 175% compared to April, most of the industry still being closed. Most of these hires came from accommodation and food services, which added 1.22 million people compared to only 460,000 the previous month.

Job vacancies in the sector also jumped from 314,000 in April to 547,000 in May.

Education and health services also saw a large increase in staff, almost doubling to 1.04 million.

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