Layoffs rose in November to 5-month high as pandemic slams hotels and restaurants

Layoffs rose in November to 5-month high as pandemic slams hotels and restaurants

The numbers: Layoffs in the U.S. rose in November to a five-month high as a record spurt of coronavirus cases slammed hotels and restaurants again and undermined the economic recovery.

Layoffs climbed by almost 300,000 to 1.97 million in November, the government said Tuesday, marking the highest level since June.

At the same time, job openings fell slightly in November to 6.53 million.

Read: The U.S. lost 140,000 jobs in December. How bad was it?

Also: Restaurants lose another 372,000 jobs in December

What happened: Restaurants and hotels laid off almost 400,000 employees in November, offsetting scattered increases in hiring in other parts of the economy.

Many states reimposed restrictions on operating hours or the number of customers allowed in stores. Diners and hotel-goers also stayed away for fear of catching the virus. As a result, many businesses had to cut staff again.

The majority of the layoffs were out West, where states like California instituted especially tough rules.

Total job separations — layoffs, firings, retirements and so forth — rose by 271,000 in November to 5.4 million.

About 5.8 million people were hired in November, down slightly from the prior month.;

The so-called quits rate was unchanged at 2.5% among private-sector employees, a surprisingly high level during a pandemic that suggests some people have stopped working to avoid catching the virus.

Big picture: Hiring waned and layoffs increased toward the end of the year as the recovery slowed and the coronavirus spread rapidly across the country, leading to an outright decline in employment in December.

Companies are likely to be cautious in adding new employees in the next few months until the pandemic recedes and government relax the latest round of business restrictions. That will keep the economic recovery in the slow lane.

What they are saying? “Hiring remains steady, but the rise in layoffs is a reminder that we are not out of the woods,” said Nick Bunker, director of Indeed Hiring Lab.  

Read: The bad news keeps coming for the economy, but it might not be as bad as it looks

Market reaction: The Dow Jones Industrial Average

and S&P 500

rose slightly in Tuesday trades.

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