Last week, the Bureau of Labor Statistics (BLS) reported that, as of the middle of February, the economy was still 9.5 million jobs below where it was in February 2020. This translates into a 11.9 million job shortfall when using a reasonable counterfactual of job growth if the recession hadn’t occurred.
Today’s BLS Job Openings and Labor Turnover Survey (JOLTS) reports little change in January 2021, a clear sign that the recovery is not charging ahead. In fact, hiring and job openings are below where they were before the recession hit, which makes it impossible to recover anytime soon when we have such a massive hole to fill in the labor market. In January, job openings mildly increased from 6.8 million to 6.9 million while hires softened for two months in a row. Hires declined from 6.1 million in November to 5.4 million in December, then down to 5.3 million in January.
One of the most striking indicators from today’s report is the job-seekers ratio—the ratio of unemployed workers (averaged for mid-January and mid-February) to job openings (at the end of January). On average, there were 10.1 million unemployed workers compared with only 6.9 million job openings. This translates into a job-seekers ratio of about 1.5 unemployed workers to every job opening. Put another way, for every 15 workers who were officially counted as unemployed, there were only available jobs for 10 of them. That means that, no matter what they did, there were no jobs for 3.1 million unemployed workers.
As with job losses, workers in certain industries are facing a steeper uphill battle. In the construction industry as well as in arts, entertainment, and recreation, there were more than three unemployed workers per job opening. This means that for every job opening, there were no jobs for two unemployed workers. In educational services, accommodation and food services, other services, and transportation and utilities, there were more than two unemployment workers per job opening. As bad as these numbers are, they miss the fact that many more weren’t counted among the unemployed: The economic pain remains widespread, with 25.1 million workers hurt by the coronavirus downturn.
On the whole, the U.S. economy is seeing a significantly slower hiring pace than we experienced in May or June. In January, hiring was below where it was before the recession, a big problem given that we have only recovered just over half of the job losses from this spring. And job openings are now substantially below where they were before the recession began (6.9 million at the end of January, compared with 7.1 million on average in the year prior to the recession).
Fortunately, Congress has passed—and President Biden is expected to sign—the American Rescue Plan, which will provide necessary relief to millions of people across the country and create conditions for a truly robust recovery.
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