U.S.-based employers announced 32,517 cuts in June 2022, a 58.8 percent increase from 20,476 cuts announced in the same month last year, according to a new job report from Challenger, Gray & Christmas.
June marks the highest month since February 2021, when 34,531 cuts were announced. It is the second time this year that cuts were higher in 2022 than the corresponding month a year earlier.
Healthcare/products manufacturers and providers announced the most job cuts this year with 19,390, which is up 54 percent from the 12,620 announced through June 2021. The automotive industry posted the second-highest cuts with 15,578, a number that is up from the 6,111 cuts in the previous year.
Andrew Challenger, senior vice president of executive search firm Challenger, Gray & Christmas, said the numbers demonstrate increasing economic strain.
“Employers are beginning to respond to financial pressures and slowing demand by cutting costs. While the labor market is still tight, that tightness may begin to ease in the next few months,” Mr. Challenger said.
Locations suffering the highest losses include California with 28,692, New York at 15,952, and Pennsylvania at 9,310.
Across industries, 4.54 million Americans quit or changed jobs in March, the highest level since December 2000, according to seasonally adjusted data released May 3 by the Bureau of Labor Statistics.
The count is up from 4.38 million in February. In the healthcare and social assistance sector, 542,000 Americans left their jobs in March, compared to 561,000 the previous month, according to the bureau.
The number of job openings in the U.S. also hit a record high of 11.55 million in March, up from 11.34 million in February, according to the bureau. Job openings in the healthcare and social assistance sector remained similar in February and March, at around 2 million.
During the pandemic, hospital CEOs are among those who have joined the list of workers quitting. Additionally, older, tenured employees in America are part of the trend.
Although there continues to be churn in the labor market, Fitch Ratings projects the U.S. labor market will recover jobs lost during the pandemic by the end of August.
Several hospitals are trimming their workforces due to financial and operational challenges, and some are offering affected workers new positions.
1. Watsonville (Calif.) Community Hospital is preparing to lay off 658 workers, according to a notice filed with the state and shared with Becker’s Hospital Review. The hospital, which filed for Chapter 11 bankruptcy in December, expects the layoffs to occur between May 16 and May 23.
2. Toledo, Ohio-based ProMedica’s health plan, Paramount, is laying off about 200 employees in July after losing a Medicaid contract. Anthem acquired Paramount’s Medicaid contract, and ProMedica and Anthem have been working to identify open roles for employees affected by the layoffs.
3. NYC Test & Trace Corps, the city’s initiative for COVID-19 testing and contact tracing, is ending universal contact tracing by the end of April. NYC Health + Hospitals, which leads the program in collaboration with the city’s department of health and other agencies, is planning to lay off 874 workers when the program scales back, according to a notice filed with state regulators March 4. The health system said affected temporary employees will be laid off at the end of April. Managerial employees affected by the layoffs will have their employment terminated between May 13 and May 27, according to the notice.
4. MarinHealth Medical Center is laying off 104 revenue cycle and supply chain employees in April after entering into a contract with Optum to provide those services, according to a notice filed with state regulators in February. Greenbrae, Calif.-based MarinHealth said that as a result of the contract with Optum, all non-contractual revenue cycle and supply chain employees will be terminated from employment with the hospital on April 9. Optum is offering jobs to most workers affected by the layoffs. Employees who accept an offer will begin employment with Optum on the first work day following separation from MarinHealth, a spokesperson for the hospital told Becker’s Hospital Review.
5. St. Mary’s Medical Center in West Palm Beach, Fla., is laying off 49 employees, including 21 registered nurses, when it stops providing mental health services in April, according to a notice filed with state regulators.
6. West Reading, Pa.-based Tower Health closed Brandywine Hospital in Coatesville, Pa., on Jan. 31. As a result of the closure, 534 employees were laid off Feb. 7, according to a notice filed with state regulators.
7. Community Hospital Long Beach (Calif.) shut down and surrendered its acute care license to the state in December, according to the Long Beach Post. The hospital laid off 328 employees early this year, according to a notice filed with state regulators. The hospital said the layoffs would begin Feb. 1 and may come in stages. The hospital’s owner is planning to transition the facility into a behavioral health and wellness campus.
The U.S. added 431,000 jobs and the unemployment rate dropped to 3.6 percent in March, according to data released Friday by the Labor Department.
Job growth fell slightly short of expectations, as consensus estimates from economists projected a gain of roughly 490,000 jobs in March and a decline in the jobless rate to 3.7 percent.
But resilient consumer spending and historically strong demand for workers helped power the U.S. economy to another study job gain.
The Labor Department also revised the January and February job gains up by a combined 95,000, bringing the total of jobs added by the U.S. economy in 2022 up to 1,685,000 million.
More Americans who left the workforce during the pandemic appeared to be returning to the job hunt in March, a promising sign as businesses struggle to fill a record number of openings. The labor force participation rate ticked higher to 62.4 percent and the employment-population ratio—the proportion of working-age adults in the labor force—rose to 60.1 percent.
Wage growth also accelerated in March with average hourly earnings rising 5.6 percent over the past 12 months, up from 5.1 percent in February.
The wage growth comes as inflation batters the Biden administration and Democrats politically, contributing to the president’s approval ratings being stuck in the low 40s. This has contributed to the anxiety in his party in a midterm election year, as Democrats are worried they could lose both the House and Senate majorities in this fall’s elections.
Gas prices have risen further with the Russian war in Ukraine and the international sanctions on Moscow. President Biden on Thursday announced he would be released 1 million barrels of oil a day from the nation’s strategic reserves to try to offer some help to lower gas prices.
The administration has touted the strength of the job market and the overall economy in the face of attacks from Republicans on inflation. And the March report offered more good news.
Overall, job-seekers continued to enjoy ample opportunities to find work at businesses across the economy even in the face of the highest annual inflation in 40 years. And businesses hit hardest by the pandemic-driven recession were among the top job-gainers in March.
The leisure and hospitality industry added 112,000 jobs in March, with restaurants and bars adding 61,000 jobs and accommodation businesses adding 25,000. Employment in the sector is still down 1.5 million from the onset of the pandemic.
Professional and business services companies gained 102,000 jobs in March and retailers added 49,000 employees, pushing both sectors well above their pre-pandemic employment levels.
The manufacturing, construction, and financial sectors also saw strong jobs gains last month.
The strong March job haul is the latest in a string of stellar employment reports. The U.S. has gained an average of 562,000 jobs each month in 2022—the same rate as in 2021, when the country added a record-breaking 6.8 million jobs
Even so, steady monthly job growth has done little to bolster Biden’s approval ratings and voters’ views about his handling of the economy. While job growth, consumer spending, the stock market and property values rebounded rapidly from the recession, a 7.9 percent annual increase in prices has wiped out the political benefit of a strong economy otherwise.
Economists are curious as to whether baby boomers who accelerated their retirement during the pandemic will return to the workforce, and if so, at what rate.
About 2.6 million older workers retired above ordinary trends since the start of the pandemic two years ago, according to a Bloomberg report citing estimates from the Federal Reserve Bank of St. Louis. Despite this boom, applications for Social Security benefits have remained fairly flat, based on calculations by the Boston College Center for Retirement Research. About 0.1 percent of the U.S. population 55 and older have applied each month, which is in line with pre-pandemic applications.
Pandemic surges in stock and real estate values made this an “opportune time for some workers to step out of the labor force and stay out of the labor force,” Lowell Ricketts, data scientist for the Institute for Economic Equity at the St. Louis Fed, told Bloomberg. “But we’re still expecting a steady, steady trend that some might want to come back,” he noted, citing remote and hybrid work as attractors for seniors eyeing a return to the job market, particularly amid high inflation.
Bureau of Labor Statistics data on labor participation shows that some baby boomers have come back, while many remain on the sidelines. Pre-pandemic, “unretirement” was not uncommon in the United States, due to financial hardship or personal choice. It’s still too soon to say whether the pandemic has challenged this dynamic.
Some “retirees” may have only one foot out the door, too. The Social Security Administration’s Office of the Chief Actuary suggested older people may have “retired” from one job and continued working in another, which explains why they haven’t applied for benefits, Bloomberg reports.
Early retirements have stood to further disrupt the healthcare labor force throughout the pandemic. For instance, census microdata from the Current Population Survey provided by the University of Minnesota shows 14,500 nurses had recently retired as of March 2021, an increase of 140 percent over that figure in March 2019, according to a Pew report. The figure represents people who worked in the profession the past year but said they were now retired and not looking for work.
U.S. jobless claims set a more than 50-year low last week as the red-hot labor market shows few signs of cooling in the near-term.
The Labor Department released its latest weekly jobless claims report Thursday at 8:30 a.m. ET. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:
Initial jobless claims, week ended March 19: 187,000 vs.210,000 expected and a revised 215,000 during prior week
Continuing claims, week ended March 12: 1.350 millionvs.1.400 million expected and a revised 1.417 million during prior week
At 187,000, new jobless claims improved for a back-to-back week and reached the lowest level since September 1969. Continuing claims also fell further to reach 1.35 million — the least since January 1970.
The labor market has remained a point of strength in the U.S. economy, with job openings still elevated but coming down from record levels as more workers rejoin the labor force from the sidelines.
Going forward, however, some economists warned that new cases of the fast-spreading sub-variant of Omicron, known as BA.2, could at least temporarily disrupt mobility and economic activity across the country. As of this week, about one-third of COVID-19 cases in the U.S. have been attributed to the sub-variant, though overall new infections have still been trending down from January’s record high. The impact on the labor market — and on demand in the service sector especially — remains to be seen.
“Right now, U.S. cases are in the sweet spot between the bottom of the initial Omicron wave and the impending explosion in BA.2 cases, but this probably won’t last long,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note this week. “Our bet … is that the coming BA.2 wave will trigger a modest but visible pull-back in the discretionary services sector, thereby dampening consumption in the first month of the second quarter.”
Still, many economists and policymakers have pointed out that the labor market withstood prior disruptions due to the Omicron wave earlier this year. Non-farm payrolls grew more than expected in each of January and February despite the outbreak.
And Federal Reserve Chair Jerome Powell reiterated his assessment of the labor market’s strength earlier this week, just days after calling the current job market “tight to an unhealthy level” in his post-Fed meeting press conference last week.
“The labor market has substantial momentum. Employment growth powered through the difficult Omicron wave, adding 1.75 million jobs over the past three months,” Powell said in a speech Monday. “By many measures, the labor market is extremely tight, significantly tighter than the very strong job market just before the pandemic.”
The tightness of the labor market has also strongly informed the Fed’s decisions in pressing ahead with tightening monetary policy, with the economy showing clear signs of strength and the ability to handle less accommodative financial conditions. Last week, the Fed raised interest rates by 25 basis points in its first rate hike since 2018. And St. Louis Fed President Jim Bullard, the lone dissenter of that decision who had called for a more aggressive 50 basis point rate hike last week, justified his vote in part given the strength of the U.S. labor market even in the face of decades-high rates of inflation.
“U.S. labor markets are today already stronger than they have been in a generation,” Bullard said in a statement.
It was a winter of surging job creation. Employers created jobs on a mass scale, Americans returned to the workforce, and the labor market shrugged off the Omicron variant and its broader pandemic funk.
That’s the takeaway from the February jobs report, which showed employers added 678,000 jobs last month. December and January job growth was better than previously thought, and the unemployment rate fell to 3.8%.
Why it matters: Yes, inflation is high as prices rose 7.5% over the last year as of January, and could rise higher as disruptions from the Ukraine war ripple through the economy.
But rising prices are coming amid an astonishingly rapid jobs boom.
Between the lines: The report shows the pandemic impact is fading. But some analysts warn not to expect this level of gains to continue as the crisis in Ukraine cuts into growth.
“The improvement in the American labor market is now very much a rearview mirror phenomenon,” economist Joe Brusuelas wrote in a research note.
One big surprise: Wage growth was essentially nonexistent, with average hourly earnings rising only a penny to $31.58.
That may reflect the nature of the jobs being added — disproportionately in the low-paying leisure and hospitality sector.
That is good news for those worried that rising wages and prices will drive further inflation. It is worse news for workers, whose average pay gain of 5.1% over the last year is far below inflation.
The share of adults in the labor force — which includes those looking for work — ticked up, as did the share of the population that’s actually employed. That suggests the robust job growth is pulling people back into the workforce, if gradually.
The labor force participation rate was 62.3% in February, more than a percentage point below its level two years ago, before the pandemic.
State of play: The Federal Reserve is set to begin an interest rate hiking campaign on March 16, amid high inflation and new geopolitical uncertainty from the Ukraine war. The new numbers are unlikely to change that one way or the other.
Good morning. Here’s Axios chief economic correspondent Neil Irwin and markets correspondent Emily Peck with what you need to know about today’s surprising jobs numbers.
After days of doom-and-gloom talk about how bad the January jobs numbers would be due to the Omicron variant, they turned out to be, um, great?
Employers added 467,000 jobs last month, despite millions out sick.
Why it matters: It’s rare for any jobs numbers to be stunning, but these were. They leave little doubt that this remains a tight job market in which employers are doing everything they can to hold on to their workers.
The big picture: Some of the biggest job gains were in categories that have strong seasonal patterns, normally adding workers in the fall and then cutting those temporary workers in January.
But employers, desperate for staff, appear to have held onto those workers in greater numbers than in a normal year.
Due to the statistical process of seasonal adjustment, “cutting fewer workers than usual for this time of year” gets translated as “adding lots of jobs.”
By the numbers: Leisure and hospitality added 151,000 jobs; retail added 61,000; and transportation and warehousing added 54,000.
Between the lines: The report offered more evidence that this is an exceptionally tight labor market with inflationary pressures brewing, giving the Federal Reserve the green light for interest rate increases.
Average hourly earnings rose a robust 0.7%, and are up 5.7% over the last year. Employers are being forced to pay up to fill their job openings.
Yes, but: Omicron really did have an effect. The report said 6 million people were unable to work because their employers were closed or lost business due to the pandemic, up from 3.1 million in December.
What they’re saying: “Had the prior relationship between Covid cases and employment held true, 800k daily new Covid cases would have led to 2.3 million job losses,” Julia Pollak, chief economist at ZipRecuiter, tweeted. “Instead, we saw 467,000 job GAINS!”
The bottom line: This is an incredibly strong labor market that is poised to strengthen further as Omicron fades.
HENRY KOTULA 