Data released by the Bureau of Labor Statistics shows that hiring reached a record high in May as the number of new hires increased to 6.5 million, up 2.4 million from April. The Job Openings and Labor Turnover report for May 2020 showed that mass layoffs fell dramatically as well, as total separations fell 5.8 million to 4.1 million—another series record. The record-setting growth in hiring is the inverse of April, when the level and rate of new hires saw record lows as the economic recession caused by COVID-19 and measures taken to contain it reached its lowest point.
In the manufacturing industry, the number of new hires shot up 100,000 from 326,000 in April to 426,000 in May as total separations fell sharply. The year-over-year rate of new hires in manufacturing was steep enough that hiring in May 2020 beat out May 2019: the BLS reported that manufacturing recorded 340,000 new hires in May 2019 compared to 426,000 two months ago. The rate of new hires for May 2020 alone in the manufacturing sector was 3.6%, up from 2.8% in April.
In the manufacturing subcategories, durable goods hiring increased only slightly, to 167,000 hires from 161 in April; it remains significantly lower than new hires in May 2019, when durable manufacturers recorded 191,000 new hires. Nondurable goods saw the lion’s share of hiring growth in manufacturing as new hires jumped from 166,000 to 259,000 in May, soundly beating the number of nondurable manufacturing hires in May 2019 (149,000).
But the growth of manufacturing hiring two months ago was not as significant as the drop-off in layoffs. Manufacturing as a whole recorded a whopping 762,000 separations in April, but only 284,000 in May. Durable manufacturers let 511,000 people go in April, and only 173,000 in May, and separations in nondurable goods fell more than 50% from April’s 251,000 layoffs to 111,000 in May 2020.
Separations, as measured by the Bureau of Labor Statistics, is a combined figure that includes employers laying off employees as well as employees who quit voluntarily. While the number of total separations in May dropped to 4.1 million, 1.5 million lower than it was in February, the proportion of workers who voluntarily quit their jobs rose compared to the rate of those who lost their jobs to layoffs. The net change in employment on a year over year basis remains at a net loss despite the uptick, with a net 12-month employment loss of 11.3 million.
The report also tracks job openings, which for the overall economy rose to 5.4 million, an increase of about 400,000 new openings for the month. New job openings in manufacturing rose by 13,000, most of them in durable goods manufacturing, which saw about 10,000 new job openings.
The Bureau of Labor Statistics, which released the JOLTS report July 7, included a note on the adverse impact of COVID-19 on data collection. Under ordinary circumstances, the Bureau collects 42% of data by phone: because of the pandemic, some respondents that ordinarily responded to the survey by phone could not be reached. The response rate for the May report was 45% compared to the average pre-pandemic response rate of 54%.
While the rapid ascent in hiring and concomitant drop in separations is a positive side for the industry and the U.S. economy, the results apply only to May: If the economy is recovering, it is imperiled by a rapidly ascendant rate of new COVID-19 cases that began to climb rapidly again towards the second half of July. A “second wave” of the coronavirus pandemic would lead to more economic chaos. The BLS JOLTS survey for June 2020 will be made available to the public August 10.
