Record Number of Americans Quitting Their Jobs as Fears Over Coronavirus Infections Mount
As the US Bureau of Labour Statistics released its latest Job Openings and Labour turnover Survey (JOLTS)-,which already came in a month late, it appears that there are some significant and alarming discrepancies between job openings, new hires, and quits.
The month of June saw the largest monthly increase in job openings since 2015, bringing the total to a whopping 5.889 million, surpassing the widely anticipated expectation of only 5.371 million. A significant portion of the increase in job openings was subject to a select few sectors, suggesting that the US job market may be on the road to a modest recovery.
The food and accommodation sector saw the largest of increases, with the addition of 198,000 job openings, followed by the arts, entertainment, and recreation sector with 34,000 new job openings. There were some sectors which experienced a decline in job openings, such as the construction industry with a drop of 70,000, and state and local government education with a decrease of 26,000 job openings in June.
Since the onset of the pandemic back in March and April, there were over 18 million more unemployed Americans than there were job openings, thus creating the disparity on record. Now in June, that gaping rift has been slightly closed with only 11.9 million more unemployed workers than job openings, which translates to approximately 3 workers for each available job.
In the meantime, the number of new hires showed a continued increase from May, with a total of 6.696 million in June. The highest increase in hires was attributed to the professional and business services with the addition of 255,000 newly hired employees, followed by accommodation and food services with 78,000, and the state and local government, excluding education at 30,000 hires.
Conversely however, the JOLT survey also found that total separations, which include layoffs, discharges, and quits, increased slightly by 1.4% in June with a total of 1.9 million. Most alarming however, is the number of Americans that voluntarily quit their jobs; the tally soared to 2.6 million in June, increasing by 1.9% since the prior month. The largest increases came from the health care and social assistance sector, the accommodation and food services sector, and the retail trade sector with 106,000, 104,000, and 99,000 quits respectively.
So, with the near-record number of job openings pointing to a labour market recovery underway, why are so many Americans simultaneously quitting their jobs? Noting that the largest increasing in job quits are stemming from public-facing industries such as food and accommodation, retail, and healthcare, these sectors also happen to carry the highest risk of coronavirus infection.
As the US takes the top spot amid all the countries with the highest count of coronavirus cases topping 5 million, it appears that an increasing number of Americans are becoming fearful of contracting the deadly virus that has so far killed over 163,000 people. As a result, many have been voluntarily quitting their jobs, thus putting the government’s optimistic outlook on a job market recovery in jeopardy.
Information for this briefing was found via the US Bureau of Labour Statistics and John Hopkins University. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
