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First Cut: April JOLTS reports confirms the implosion in job openings and new hires and explosion of job separations

The April data on job openings and labor turnover (JOLTS) showed the contraction in the labor market continued after the abrupt and outsized declines in March. The numbers lag the Employment Situation by a month but are still useful in creating some nuance as to what has happened to the labor market in the early months of the contraction that has followed the arrival of the COVID-19 pandemic.

Job openings fell 965,000 to 5.046 million in April and were essentially as large as the decline in March. The rate of job openings was down a tenth in April to 3.7%, its lowest since 3.7% in January 2017.

The number of hires lost was nearly double the prior month at down 1.587 million in April to 3.524 million. The hire rate fell to 2.7% in April after 3.4% in March and was a series low.

The number of separations in April was fewer than in March, but still massive. There were 9.888 million separations, down 4.755 million from the prior month but only retracing about half the 8.940 million increase in March. The rate of separations fell to 7.5% in April after 9.7% in March. These are the second and first highest readings in the series, respectively, and by a fairly large gap.

Net turnover – hires less separations – was down 6.364 million in April after falling 9.532 million in March. These are unprecedented changes for which it is difficult to see any quick turnaround.

The number of voluntary job leavers – a subset of separations and widely viewed as a gauge of the health of the labor market – fell 1.003 million in April to 1.786 million. It was falling at an increased pace for the past three months. The rate of quits was down to 1.4% in April after 1.8% in March and was the lowest since 1.4% in April 2011 when the labor market was still sluggish after the Great Recession.

The Beveridge Curve – comparing the rate of job openings to the national unemployment rate – illlustrates just how deeply the labor market has declined in a single month.

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