Job Layoffs in April Fall to Record Low
According to today's BLS report on Job Openings and Labor Turnover, job layoffs and discharges fell to 1.5 million in April, the lowest level since the BLS started tracking "involuntary separations" in 2001 (see chart above). This is a positive sign that the labor market is gradually stabilizing as job layoffs are becoming much less frequent, and are in fact now way below the pre-recession average of almost 2 million when the jobless rate averaged 5.5 percent. Read more here at The Enterprise Blog.
Update: The chart below displays monthly layoffs as a percent of total civilian employment to adjust for the number of jobs, and the pattern is the same as the unadjusted number of layoffs in the graph above. By either measure, layoffs are at the lowest level since the BLS started tracking "involuntary separations" in 2001.
14 Comments:
Obama's new job creation plan laid out yesterday:
"Our task is to not panic."
And how his plan will achieve economic growth:
"It's got to accelerate."
It's an interesting point.
But with a smaller labor force, does the % of people laid off matter more than the actual number?
If so, I wonder what that % is.
James
James Frasch asked the cogent question. I say that when the body stops bleeding, it is not necessarily a sign of recovery.
We know all the problems with government employment data, the missing numbers, the people no longer perceived, who have been "unemployed" for years while scraping by working for cash off the books. You help a guy unload a truck today. If he doesn't need you tomorrow, that is not a "layoff" because you were never "employed."
i agrees with you james. the lower the workforce participation % gets, the lower this number will get as well.
it would be interesting to chart this data as a % of civilian labor force and see if that affects the trend.
this is also not a number you can take in isolation.
you have to look at it relative to job creation, which is pretty punk (and getting punker) just now.
actually, it would be better to see this as a % of "employed". (civ lab force X participation rate)
clearly those in the "labor force" but not employed cannot be laid off.
See update with new chart showing layoffs/employed. The pattern is the same and layoffs (unadjusted or adjusted) are at the lowest level since 2001.
Note that weekly jobless claims are NOT adjusted for the size of the labor force, the number of employed, or the population, and are therefore subject to the same criticisms.
This is not necessarily a good sign of future job prospects.
There are fewer layoffs, because fewer firms may have gone out of business, two years after the trough, and fewer businesses may have started.
Surviving or exising businesses are likely better or well managed today.
Consumers remain cautious and producers remain uncertain.
Productivity is still too high to boost hiring:
June 02, 2011
"Productivity of U.S. firms climbed 1.8 percent in the first quarter, compared with an advance of 2.9 percent in the final three months of 2010."
"Note that weekly jobless claims are NOT adjusted for the size of the labor force, the number of employed, or the population, and are therefore subject to the same criticisms."
yes, but they are an absolute number and therefore comparable to layoffs and to payrolls.
this is where this data gets tricky.
layoffs in april were about 1.5mm.
initial claims were 1.7mm.
that seems plausible.
but here's what i don't understand.
layoffs in 2003 seemed to average about 2 million/mo, while initial claims seemed to be considerably LOWER at about 1.5mm/mo.
this implies that some dynamic has changed significantly.
why were we getting fewer claims than layoffs then and why more now?
this would seem to imply a much weaker current job market. they, you got laid off and found a job before filing unemployment, now you file and stay on for record periods.
i'm still sort of chewing on this.
alternate interpretations of that data?
it seems unlikely that attitudes about collecting unemployment have changed that dramatically in 7 years.
why is the claims/layoffs ratio so much higher now?
1.13 vs .75 is a 51% increase and crosses unity. that has to be indicative of something.
Or final sales are still too low:
Martin Feldstein
June 8, 2011
Feldstein points out that while gross domestic product the broadest measure of economic activity, grew at a disappointing 1.8% rate in the first quarter, much of that growth was due to businesses increasing inventory.
Sales grew at an even more dismal annual rate of 0.6%.
"The data for May are beginning to arrive and are even worse than April's," he added.
"They are marked by a collapse in payroll-employment gains; a higher unemployment rate; manufacturers' reports of slower orders and production; weak chain-store sales; and a sharp drop in consumer confidence."
Reality check. The reported U-3 rate is 9.1%, U-6 stands at 15.8%, and if we account for the long-term discouraged workers, who were defined out of official existence in Clinton's first term, we have a total unemployment rate of 22%.
Sorry Mark but I can't see how you can try to spin this as a big positive.
"The data for May are beginning to arrive and are even worse than April's," he added.
If Bernanke keeps his words and stops monetizing the debt we could see another collapse as people run out of money and more of them wind up losing jobs that never should have been in in the first place.
Agree the initial claims numbers don't seem to match the layoffs. There can be a delay of months before a layoff would turn into a initial claim so maybe the time dynamic has changed over the years.
Since layoff announcements would precede an initial claim, is that a signal that future claims will plunge? Did the Japan crisis impact on auto employment impact claims so much that the numbers are set to plunge during June/July?
With only 1.5M layoffs shouldn't claims be 300K max?
The U.S. creates and destroys millions of jobs each month.
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