The labor market started regaining momentum in the fall of 2024, and it continued through March.
By Wolf Richter for WOLF STREET.
Layoffs and discharges plunged by 222,000 workers in March from February, seasonally adjusted, to 1.56 million (blue line in the chart below), the lowest since November 2023, and far below the pre-pandemic range, despite the layoffs and discharges at federal, state, and local governments that soared to 107,000 workers, the highest since the end of the Census taking period in late 2020.
These are workers who got fired with or without cause – a common feature of the US labor market – and workers who got laid off for economic reasons. But it does not include retirements, deaths, etc., which are in the category of “other separations.” And it does not include people who quit voluntarily to take a better job elsewhere; those folks are included in “quits” below.
The three-month average, which irons out the month-to-month squiggles and revisions, declined to 1.67 million, the lowest since August 2024 (red line). This data from the Job Openings and Labor Turnover Survey (JOLTS) by the Bureau of Labor Statistics today is based on surveys of about 21,000 work locations.
Quits soared by 82,000 workers in March from February, to 3.33 million, the highest since July 2024, despite a drop in quits at government work sites.
These are people who voluntarily quit their jobs – not including retirements, deaths, etc. – such as to take a hopefully better job somewhere else.
At just private sector employers (chart below), quits soared by 91,000 workers, to 3.15 million, the highest since April 2024. The three-month average soared to 3.09 million.
A higher rate of quits means workers feel more confident and/or see better opportunities elsewhere.
But quits are still below pre-pandemic levels, as employers succeeded in scaring the bejesus out of their employees by announcing mass-layoffs starting in mid-2022, a strategy with which they attempted – successfully, I would have to say – to calm down the enormous churn in their workforce during the pandemic when employees quit jobs in huge numbers, and employers were forced to pay much higher wages to hang on to the ones they still had, and to hire new workers to fill the slots left behind by quitting employees. This churn got to be very expensive and reduced productivity, and employers began to reassert their power in mid-2022 and got employees to hang on to their jobs and be grateful they even had jobs.
These still lower-than-prepandemic quits means fewer job openings left behind than before, as we’ll see in a moment. And for employers, that’s a good thing.
Hires jumped by 41,000 in March from February, to 5.41 million, seasonally adjusted, the most hires since September 2004.
The three-month average rose by 12,000 to 5.38 million, the highest since November 2024.
Labor turnover, or what creates job openings: Employees quitting their jobs, getting fired, laid off, or discharged for other reasons, such as retirements; and to a small extent, employers increasing the size of their staff (as tracked by the nonfarm payrolls).
In March, there were 3.33 million quits and 1.56 million layoffs and discharges, for a total of 4.89 million not counting retirements and other discharges, versus just 228,000 new payroll jobs created (which was a healthy number).
So a low number of quits, layoffs, and discharges leave fewer job openings behind, which explains the drop in job openings. This is not a measure of new jobs being created, but of churn in the labor force — also indicated in the title of the data JOLTS, where the L and T stand for Labor Turnover. And the churn has calmed down.
Job openings declined by 288,000 in March from February, to 7.19 million, the smallest number since September. This includes government job openings, which dropped month-to-month by 59,000, to 833,000 openings, the lowest since early 2021.
Private-sector job openings declined by 229,000 to 6.36 million (chart below). The three-month average declined by 92,000 in March to 6.6 million job openings.
This JOLTS data of job openings is not based on online job postings (fake or otherwise), but on surveys of about 21,000 private-sector and government work locations.
Regaining momentum: As the above charts of layoffs and discharges, quits, and hires show, the labor market, which had been losing momentum through mid-2024, started regaining momentum in the fall of 2024, and that turnaround has continued through March.
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The post Despite All Moaning and Groaning: Layoffs & Discharges Plunge, Hires and Voluntary Quits Rise, Driven by Private Sector Strength appeared first on Energy News Beat.
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