Last week, the Bureau of Labor Statistics (BLS) reported that, as of the middle of December, the economy recorded 140,000 in job losses and the economy was still 9.8 million jobs below where it was in February. Today’s BLS Job Openings and Labor Turnover Survey (JOLTS) reports little change in November, a clear and confirming sign that the recovery is not charging ahead. In fact, hiring and job openings are below where they were before the recession hit, which makes it impossible to recover anytime soon, when we have such a massive hole to fill in the labor market.
In November, job openings softened mildly (from 6.6 to 6.5 million) while hires were essentially unchanged, rising slightly (from 5.91 to 5.98 million). Another troubling sign was the large increase in layoffs (from 1.7 to 2.0 million). The number of layoffs and discharges increased notably in accommodation and food services, health care and social assistance, and state and local government.
On the whole, the U.S. economy is seeing a significantly slower hiring pace than we experienced in May or June—roughly where it was before the recession, which is a big problem given that we have only recovered just over half of the job losses from this spring. And job openings are now substantially below where they were before the recession began (6.5 million at the end of November, compared to 7.1 million on average in the year prior to the recession). And today’s data release only covers through November, so it doesn’t even capture December’s job losses, which were substantial. With hiring and job openings at these levels, the economy is facing a long, slow recovery without additional action from Congress.
One of the most striking indicators from today’s report is the job seekers ratio, that is, the ratio of unemployed workers (averaged for mid-November and mid-December) to job openings (at the end of October). On average, there were 10.7 million unemployed workers while there were only 6.5 million job openings. This translates into a job seeker ratio of about 1.6 unemployed workers to every job opening. Another way to think about this: for every 16 workers who were officially counted as unemployed, there were only available jobs for 10 of them. That means, no matter what they did, there were no jobs for 4.2 million unemployed workers. And this misses the fact that many more weren’t counted among the unemployed. The economic pain remains widespread with 26.8 million workers hurt by the coronavirus downturn.
With growing COIVD-19 cases and falling employment, the incoming Biden administration will be facing a mounting, not waning, crisis. The latest congressional relief bill is an important step toward addressing some of this pain, but it is not at the scale of the problem. I’m hopeful that more relief measures are on the horizon for increasingly desperate workers and their families. Senate Republicans forced the December bill to be far too small. Fortunately, with the Democratic majority in the Senate given the results of the Georgia runoffs, Democrats will now be able to get more relief measures through reconciliation. Their top priorities must be aid to state and local governments and further extensions of unemployment insurance.