May 18, 2020 - Economy & Business

Job openings report shows record unemployment rate still understates true number

Dion Rabouin, author of Markets
Data: Federal Reserve Bank of St. Louis; Chart: Naema Ahmed/Axios

The less-followed U.S. jobs report, the Job Openings and Labor Turnover Survey, released Friday showed there were more than 11 million layoffs in March, a record high.

Why it matters: March's nonfarm payrolls report found just 881,000 jobs lost, so the JOLTS report showed the damage that came in the second half of the month as a result of the coronavirus pandemic.

The intrigue: While March's JOLTS report showed a record 8.8 million more jobs lost than the March payrolls report, on a percentage basis the nearly 396% difference in layoffs was lower than the 397% difference between the two reports seen in September 2019.

  • Between December 2000, when the JOLTS report began, and March 2020, the average difference was less than a quarter of that — 94.7%.
  • 2019's layoffs averaged a 152% difference between the two reports, meaning the payrolls report missed a much larger number of layoffs than average.

Between the lines: The JOLTS report also showed that in addition to layoffs, job openings declined materially starting in August 2019.

  • That could mean the labor market was not as strong at the end of the year as the nonfarm payrolls report suggested.
  • Economists say unusually warm winter weather and enthusiasm about the U.S.-China trade deal had helped reverse that trend at the beginning of 2020.

How it works: The Labor Department's nonfarm payrolls report is more timely and closely followed but doesn't account for jobs lost after the typical second payroll period of the previous month (usually between the 12th and the 17th day), a Bureau of Labor Statistics representative tells Axios.

  • Even its revisions only account for data available during that period (the initial March payrolls report showed only 701,000 jobs lost in March).

On the other side: The JOLTS report normally begins collecting data on the last day of the month, BLS says.

  • From there, data collection continues for the next two weeks and is released a month later (e.g. March's report is released in May).

Go deeper: Creaky unemployment systems plague jobless Americans

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