U.S. JOLTS Job Openings Fall in May but Labor Market Shows Resilience

The number of job openings fell 4.8% m/m in May to 9.824 million from 10.320 million in April, revised up from 10.103 million. This was the fourth monthly decrease in the past five months. The decline was in line with market expectations, which looked for a fall to 9.9 million. The job openings rate slipped to 5.9% in May from 6.2% in April. Along with the 5.9% posted in March this was the lowest rate since March 2021. This ratio is job openings as a percent of total nonfarm employment plus openings.

The number of job openings continued to exceed the number unemployed by quite a bit. However, this excess fell markedly in May to 3.727 million, the lowest level since September 2021, from 4.663 million in April. Still, this is well above the 1.3 million level that prevailed prior to the pandemic.

Among the major sectors of the economy, the job openings rate fell meaningfully in manufacturing (4.4% in May versus 4.9% in April), education and health services (7.1% versus 8.0%) and leisure and hospitality (7.5% versus 8.1%). It rose in construction (4.4% versus 4.2%) and professional and business services (7.3% versus 7.0%).

Total new hires increased 1.8% m/m in May to 6.208 million, their second consecutive monthly increase, from a downwardly revised 6.101 million in April (initially 6.115 million). New hiring has been on a slight downtrend over the year and a half but remains at a monthly pace that is slightly faster than immediately prior to the pandemic. The hiring rate edged up to 4.0% in May from 3.9% in April, which had tied the lowest rate since April 2020. The hiring rate rose across all major sectors in May with professional and business services the only sector posting a decline, the continuation of a yearlong trend.

Total separations increased 3.7% m/m to 5.871 million in May from 5.660 million in April. This was the second monthly increase in separations in the past three months, but reflected an increase in quits and a decrease in layoffs. The separation rate increased to 3.8% in May from 3.6% in April. Total separations include quits, layoffs and discharges, and other separations. Quits are generally voluntary separations initiated by the employee. Therefore, quits can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Quits increased 6.6% m/m in May with the quit rate rising to 2.6% from 2.4%. This is the highest level of quits so far this year, further evidence of labor-market resilience. By contrast, layoffs fell 2.2% m/m to 1.555 million, the lowest level since December, on top of an outsized 13.8% m/m decline in April.

Private-sector job openings fell 6.4% in May to 8.693 million, their lowest level since April 2021. New private-sector hires increased 1.7% m/m to 5.805 million, their highest level since January. Private-sector separations rose 4.1% m/m to 5.523 million, reflecting a 7.1% m/m increase in quits and a 2.1% m/m decline in layoffs.

The Job Openings and Labor Turnover Survey (JOLTS) are available in Haver's USECON database.