- The number of people being laid off in the US hit a record low in May, jobs data revealed.
- It suggests companies are keeping hold of their staff amid the huge labor shortage.
- Many companies are struggling to find staff, and have been raising wages as a result.
- See more stories on Insider’s business page.
The number of layoffs in the US hit a record low in May, jobs data from the Bureau of Labor Statistics (BLS) showed.
It’s a sign that companies are clinging onto their workers during a severe labor shortage.
The layoffs and discharge rate dropped to 0.9% in May, according to the BLS report released Wednesday, a record low dating back to 2001. This means that for every 1,000 workers, nine were laid off.
In the accommodation and food services sector, where the labor shortage has hit hardest, the rate fell from 1.5% in April to 1.2% in May, according to the report.
This is down from 1.8% in May 2020, the report showed.
The labor shortage caused some businesses to cut operating hours, slash production, and raise prices. Nearly half of US restaurant owners said they struggled to pay their rent in May because staffing shortages reduced their revenues.
The number of job openings in the US rose to over 9.2 million in May, breaking a record for the second consecutive month, the report revealed. There were nearly 4 million more job openings in May than there were the same month a year ago.
“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,” Nick Bunker, labor market researcher at Indeed, told Axios on Wednesday.
Many US businesses are short-staffed as the economy starts to reopen. The US Chamber of Commerce previously called the current labor shortage a “national economic emergency.”
Some companies told the Federal Reserve in June that they blamed the shortage on unemployment benefits, childcare responsibilities, transport issues, stimulus payments, and COVID-19 safety concerns.