Jul 7, 2021 - Economy

Layoffs hit all-time low

A hand clutches a portfolio with a paper on top that reads "We are hiring" in bold letters at a job fair at the Seminole Hard Rock Casino in May.

Florida residents attend a job fair at the Seminole Hard Rock Casino in May. Photo: Octavio Jones/Getty Images

Never have so few people been let go by employers, according to closely watched jobs data out Wednesday. Put another way: Companies are holding onto staff for dear life.

Why it matters: It's another sign of the American worker's newfound leverage, ushered in by businesses' desperation for workers to meet the demand of the economic snapback.

  • "Demand is high and employers might not be getting the number of hires that they want — so they're holding on to the workers they do have," says Indeed's Nick Bunker.

By the numbers: The layoffs and discharge rate fell to 0.9% in May — a new record low dating back to 2001.

  • That means for every 1,000 workers, about nine were let go.
Data: Bureau of Labor Statistics via FRED; Chart: Axios Visuals
Data: Bureau of Labor Statistics via FRED; Chart: Axios Visuals

The massive shift for workers is particularly notable in the accommodations and food services sector, where labor shortage complaints have been most acute.

  • That rate of layoffs and discharges fell to 1.2% from 1.5% in a single month.
  • It's down from 2% in January — and almost a full percentage point below the same period a year ago.

The big picture: The number of open jobs ticked higher to 9.2 million, the second straight record-breaking month.

The bottom line: Workers leaving their jobs mostly aren't getting fired, they're doing so on their own terms — at a historic rate.

  • About 68% of work separations were categorized at quits — easing from April, when a record number of people quit their job.
  • It's one of the best times to find a new job or ask for a raise in a while, "which feels like a weird thing to say during the middle of an ongoing pandemic," says Glassdoor's senior economist Daniel Zhao.
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