Prolonged Recovery Still Expected, More Hires Than Separations
More people are getting hired than are leaving or being involuntarily separated from their jobs, per the latest data available from the U.S. Bureau of Labor Statistics (BLS). But the gap between the two categories is narrowing, suggesting a prolonged economic recovery lies ahead.
Reporting on hires and separations lags headline job growth numbers by a month or more, but the data provides a deeper level of visibility into how much movement exists within the national labor market. Hiring volume is especially important for recruiters given their focus on finding and placing talent.
On a seasonally adjusted basis, 5.8 million hires were made in July, according to the BLS. While the number of hires slowed by 1.2 million from a month earlier, it nonetheless outpaced the number of total job separations in July, which were at 5.0 million. Total separations include “quits,” which are usually voluntary separations initiated by the employee, as well as “layoffs and discharges,” which are involuntary separations initiated by the employer.
Even with the sluggish recovery, LaborIQ® by ThinkWhy estimates that half of the jobs lost during the pandemic have been recovered.
The figures show that almost half the jobs lost in March and April due to COVID-19 have now been recovered. However, if the gap between hires and separations continues to narrow, it will take much longer to recover the remaining jobs. Anticipating that trend as the baseline forecast, LaborIQ® by ThinkWhy projects it will take until late 2023 for the U.S. to recover all the jobs lost in the coronavirus recession, although some industries and locations will rebound faster.
On a more positive note, the BLS says the number of job openings is increasing, signaling that businesses anticipate adding more jobs. There were 6.6 million jobs open on a seasonally adjusted basis in July, up by 4.5% from the previous month. But the BLS’s headline unemployment level for July was more than 16.3 million people, though, it dropped to 13.5 million people in August. While the increase in openings is great news for recruitment professionals, one challenge for them will be sorting through an anticipated flood of resumes to find qualified job candidates.
There is plenty of room for optimism about the economic recovery, given the ground made up so far and talk about development and distribution of a coronavirus vaccine in the next four or five months or even earlier. Job openings have increased, but not nearly to the level that’s needed to get everyone back to work. Businesses should look for more moderate growth through the end of this year and a full recovery that’s still a few years away.
LaborIQ by ThinkWhy continuously monitors and forecasts labor data at all levels, measuring impact to cities, industries, occupations and business across the U.S.