Economic Indicators | Budget, Taxes, and Public Investment

News from EPI A huge jobs deficit remains, by any measure: Congress must provide more relief

Last week, the Bureau of Labor Statistics (BLS) reported that, as of the middle of August, the economy was still 11.5 million jobs below where it was in February. Today’s BLS Job Openings and Labor Turnover Survey (JOLTS) reports that the labor market was down 9.6 million jobs at the end of July. While there have been some improvements in hiring over the last couple of months, no matter how it is measured, the U.S. economy is still facing a huge job shortfall.

One of the most striking indicators from today’s report is the job seekers ratio, that is, the ratio of unemployed workers (averaged for mid-July and mid-August) to job openings (at the end of July). On average, there were 14.9 million unemployed workers while there were only 6.6 million job openings. This translates into a job seekers ratio of 2.3 to every job opening. Another way to think about this: for every 23 workers who were officially counted as unemployed, there were only available jobs for 10 of them. That means, no matter what they did, there were no jobs for 8.3 million unemployed workers. And this misses the fact that many more weren’t counted among the unemployed. Further, this morning’s JOLTS data show hiring has slowed dramatically and is now slightly below pre-virus levels. This is particularly concerning given the enormous remaining jobs deficit. Without congressional action to stimulate the economy, we are facing a slow, painful recovery.

While many families face eviction and hunger, it is essential that Congress provide relief to all of those unemployed workers who have no hope for employment and are desperately trying to make ends meet. Without it, the labor market will recovery more slowly. The extra $600 that Senate Republicans failed to renew was not only providing relief to workers and their families, but was supporting a huge amount of spending, which spurs growth in demand for goods and services, thereby spurring job growth. Therefore, this drop in benefits will make it far harder in coming months to claw back the jobs lost during the pandemic. Now is the time for Congress to reinstate those benefits that support jobs and provide much needed fiscal relief to state and local governments so they can continue to provide necessary services and prevent unnecessary cuts to their budgets as their revenue falls in the face of the historically large shutdown in economic activity.

Quick reminders about the Job Openings and Labor Turnover Survey (JOLTS):

  • JOLTS data provide information on all pieces that go into the net change in the number of jobs. These components include hires, layoffs, voluntary quits, and other job separations (which includes retirements and worker deaths). Putting those components together reveals the overall (or net) change.
  • JOLTS data provide information about the end of one month to the end of the next, whereas the monthly employment numbers provide information from the middle of one month to the middle of the next.

See related work on Public Investment | Jobs | Jobs and Unemployment | Coronavirus

See more work by Elise Gould