Slight Drop in Total Hires at the Start of 2021
January 2021 marked the third consecutive month that the number of new hires dropped, according to the latest data from the Bureau of Labor Statistics. Total hires went from 5.4 million in December 2020 to 5.3 million in January on a seasonally adjusted basis in the U.S. Both totals are low compared to pre-pandemic levels. Only March and April 2020 – the peak of the economic fallout – had fewer hires in recent years. However, LaborIQ® by ThinkWhy expects to see increased activity as the economy gains momentum and bounces back from its sluggish start to 2021, which coincided with a rise in virus counts.
What Will Be the Impact on Hiring?
Since the end of Q3 2020, the Quits rate – an indicator of whether people are open to leaving their current job – has remained at levels seen before the pandemic and may indicate that more people are contemplating new opportunities. As businesses reopen, more workers may question if they are in the right job. Based on ThinkWhy’s analysis of the Real-Time Population Survey, employment gains have mostly come from workers starting at a new employer.
LaborIQ projects the U.S. to reach 73 million hires in 2021, exceeding 2020 hiring activity. While the 2021 number includes millions of the currently unemployed finding work as the economy recovers, LaborIQ does not expect enough workers will be hired to return the labor market to its full pre-pandemic level. Further, February’s job gains underpin the slow progression to full employment, still a couple years out – in mid- to late 2023.
Revision Note: In today’s release the Bureau of Labor Statistics reduced December’s hires level from 5.5 million to 5.4 million. Job Openings for December were also revised up to 6.7 million from 6.6 million previously estimated.
LaborIQ by ThinkWhy reports, forecasts and advises on employment conditions and the impact to jobs, industries and businesses across all U.S. cities.