U.S. JOLTS Job Openings Slid Modestly in June, But Labor Market Still Tight

The number of job openings edged down 0.4% m/m (-12.6% y/y) in June, their fifth monthly decline in the past six months, to 9.582 million from a downwardly revised 9.616 million in May (previously (9.824 million) according to the Job Opening and Labor Turnover Survey (JOLTS). The decline was slightly less than market expectations, which looked for a 1.8% m/m fall to 9.65 million. The job openings rate was unchanged at 5.8% with a 0.1%-point downward revision to May. Along with the May reading 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 a substantial amount. This excess rebounded slightly in June to 3.625 million from 3.519 million in May. However, this figure remains on a slight downtrend and well below its record 6.055 million in March 2022. Prior to the pandemic, this level had peaked at just under 1.4 million. So, the labor market, while on a softening trend, remains quite tight by historical standards.

Private sector openings edged down 44,000 (-0.5% m/m) in June with declines in every major sector except for education and health services (+123,000, +6.5% m/m). By contrast, government job openings rose 10,000 (+0.9% m/m) in June.

Total new hires fell 5.2% m/m in June to 5.905 million from 6.231 million in May (revised up marginally from 6.208 million). This was their first monthly decline in the past three months. New hiring has been on a slight downtrend over the past year and a half but remains at a monthly pace that is slightly faster than immediately prior to the pandemic. The hiring rate slipped to 3.8% in June, it lowest since April 2020. Hiring fell in both the private and government sectors. The decline in private hiring was rather widespread with monthly increases only in professional and business services (+1.6% m/m) and in leisure and hospitality (+0.2% m/m).

Total separations fell 288,000 (-4.9% m/m) in June, marginally more than reversing their 4.7% monthly increase in May. This reflected a 295,000 decrease in quits, a 19,000 decline in layoffs and a 26,000 increase in “other” separations. The total separation rate fell to 3.6% in June from 3.8% in May. The June reading tied the one in April for the lowest separation rate since January 2021. 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. After declining throughout 2022, quits have been relatively flat this year. Layoffs and discharges were on a clear uptrend earlier this year but have now declined in each of the past three months, pointing to some renewed resilience in the labor market.

Total separations fell in both the private and government sectors in June. Private-sector declines were relatively widespread across sectors with only information (+4.8% m/m) and professional and business services (+12.7% m/m) posting increases.

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