The Labor Ministry report on Tuesday also showed a rebound in job vacancies, a measure of labor demand, which economists said was difficult to reconcile with the 31.5 million people receiving unemployment checks mid-June.
“The job market is hard to read right now with many cross currents and anomalies as the country begins to get back on its feet,” said Chris Rupkey, chief economist at MUFG in New York.
“It’s hard to imagine that these millions of job openings across the country are real. We think many of the openings are just leftovers from the best job market in 50 years at the start of a year. ”
The monthly job openings and job turnover rate, or JOLTS, survey found that hiring accelerated from 2.4 million jobs to 6.5 million, the highest since the government began following the series in 2000. The hiring rate reached an all-time high of 4.9% compared to 3.1% in April.
Friday’s report followed news that the economy had created a record 4.8 million jobs in June. Non-farm payrolls rebounded from a historic drop of 20.787 million in April as the labor market weakened from the closure of businesses in mid-March to slow the spread of the coronavirus.
But resumption of hiring has been overtaken by record peaks of new COVID-19 infections in large parts of the country, including Arizona and the highly populated states of California, Florida, and Texas, which have forced several jurisdictions to reduce or suspend reopenings and send workers home.
Even with the record number of hires in the past two months, employment is 14.7 million jobs below its pre-pandemic level.
Stocks on Wall Street were trading lower as investors worried about the outbursts of COVID-19. The dollar remained stable against a basket of currencies. Prices in the US treasury have changed little.
Hiring in May was driven by the accommodation and food services industry. Increases were also recorded in health care and social assistance and construction activities. With the rebound in hiring, layoffs and layoffs fell 5.9 million to 1.8 million in May. The accommodation and food services industry accounts for most of the decline in layoffs. There were also decreases in the retail sector.
Layoffs and layoff rates fell to 1.4% from 5.9% in April. The layoff rate hit a record high of 7.6% in March.
Economists noted that the 1.8 million layoffs in May were far less than the more than 8 million new claims for regular unemployment insurance (UI) benefits registered during the month.
“This suggests that a significant portion of the initial unemployment insurance claims in May came from layoffs in March or April, and that people were waiting to file claims until May, or state agencies were working to process the claims. backlogs, ”said Elise Gould, a senior. economist at the Economic Policy Institute in Washington.
“Unfortunately, there are more recent indicators that layoffs will resume with people laid off for the second time and hirings will likely also slow. ”
Job vacancies increased by 401,000 to 5.4 million the last working day of May. Vacancies increased in the accommodation and food services, retail and construction sectors. The increase occurred in the Southern region, which reopened businesses faster than in other parts of the country. The increase in new cases of coronavirus is concentrated in the South.
Job vacancies fell in the information, federal and educational services sectors. The job creation rate rose to 3.9% from 3.7% in April. There were approximately 3.6 workers each time a job was opened in May.
“Unemployed workers are currently receiving expanded unemployment insurance, but these programs are scheduled to expire this month,” said Nick Bunker, director of research at Indeed Hiring Lab. “These data suggest that even if workers start looking more intensely, they have fewer job opportunities. ”
The number of people leaving their jobs voluntarily increased by 190,000 to 2.1 million. The quit rate, which is viewed by policy makers and economists as a measure of confidence in the labor market, rose to 1.6% from the nine-year low of 1.4% in April.
Report by Lucia Mutikani; Editing by Sandra Maler and Bernadette Baum
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