Layoffs Fell in May to Pre-Coronavirus Levels - The Wall Street Journal

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Employees work at a restaurant in Houston on May 23.
Photo: Callaghan O'Hare/Bloomberg News

Updated July 7, 2020 2:20 pm ET

The number of Americans dismissed from their jobs fell sharply in May to match levels recorded before the coronavirus pandemic and related shutdowns caused widespread layoffs.

In May, 1.8 million workers were laid off or otherwise discharged from their jobs, the Labor Department said Tuesday. That was down from 7.7 million in April and 11.5 million in March. May’s dismissals were in line with the numbers reported in January and February, before the pandemic shut swaths of the U.S. economy.

Tuesday’s report showed hirings and the number of open jobs also rose in May from April, signs that the labor market was healing this spring. However, the 5.4 million openings in May were dwarfed by the 21 million Americans unemployed that month.

“Layoffs and discharges are settling back to levels similar to those we saw before the virus, and hiring snapped back as employers recalled workers,” said Nick Bunker, an economist with job search site Indeed. But employer demand for workers moving forward is depressed, he said, noting job openings are down 23% compared with February.

The numbers, which reflect the job market through the last business day of May, are consistent with other measures showing that hiring picked up and layoffs eased late this spring. The data don’t capture the recent increase in Covid-19 cases in several states and related moves by governors to halt or reverse plans to reopen their economies.

The separate monthly jobs report, released last week, showed U.S. employers added about 7.5 million jobs to payrolls in May and June, after losing 22.2 million in March and April.

However, Tuesday’s report, the Job Openings and Labor Turnover Survey, a poll of employers, showed a low number of layoffs relative to the roughly 10 million Americans who sought unemployment benefits in May. Not all applications for benefits are approved. The number receiving ongoing benefits fell by nearly two million during the month.

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Tuesday’s numbers indicate that while hiring was historically strong in May, there were relatively few open jobs compared with those seeking work.

Job openings had exceeded unemployment from early 2018 until March. It was the first such streak dating back to 2000. In May, there were 15.6 million more unemployed Americans than available jobs.

Job openings increased the most in accommodation and food services in May, up 196,000. Openings in retail and construction also jumped. Job openings decreased in the information sector by 55,000, a category that includes certain tech firms, movie studios and newspaper publishers. Available jobs in the federal government and at schools also decreased.

The number of job openings increased the most in the South, the region of the country that acted most aggressively this spring to lift restrictions on business operations.

The report also showed the share of U.S. workers quitting their jobs—a proxy for confidence in the labor market—edged up in May from April, but was still well down from last year when the quits rate matched a high on records back to 2000.