Has the Job Market Turned A New Corner?
Is the job market turning over a new leaf? According to the Labor Department, more Americans voluntarily left their jobs in September than any other month since the pandemic. Despite the number of coronavirus cases skyrocketing, job openings are increasing, and the number of layoffs is declining. So, has the job market turned a new corner? Let’s take a closer look.
3 million voluntary quits
The US Department of Labor reported this week that the number of people who voluntarily quit their jobs increased to 3.0 million in September. That is the most voluntary quits in the last 7+ months. Additionally, the number of available jobs rose to 6.44 million, and layoffs and discharges decreased to 1.3 million (down 0.9%).
So, in what industries are people quitting their jobs? Increases in voluntary quits were noticeable in the accommodation and food services industry, construction, and professional and business services. The confidence with workers in these industries is also reflected in the latest Jobs Report, showing that these industries have the most significant employment rebounds.
A pandemic-low unemployment rate
The unemployment rate also hit a pandemic-era low last month of 6.9%, down 1% from September. The number of job gains also well surpassed economists’ predictions with the addition of 638,000 nonfarm payrolls. “The rebound continues to have strong momentum, more than people were thinking,” said John Briggs, head of strategy at NatWest Markets. “Private payrolls blowout, the participation rate went up 0.3… People are coming back into the economy, and [the unemployment rate] still went down a full percentage point.” The combination of more job openings and lower unemployment levels is a prominent indicator that the labor market is rebounding.
An unexpected startup boom
Moreover, in a surprising turn of events is a boom in American startups. Business applications crashed when the virus first hit, but the third quarter of 2020 produced the highest number of applications on record. So, as unemployment levels reached an all-time high, thousands of Americans put on their entrepreneurship hats. The largest area for new business formation is online retail, which is interesting because the coronavirus has crushed traditional brick-and-mortar retail.
However, will this spark in startup formations fill our country’s significant unemployment void? As of now, it looks like the job market is turning a new corner. Time will tell, but this boom of optimism is really refreshing as we quickly approach the end of the year.