Job openings in the United States unexpectedly increased in May, providing a steadying signal for the labor market ahead of the June jobs report. According to new data from the Bureau of Labor Statistics released on Tuesday, there were 8.14 million job openings at the end of May, up from 7.92 million in April. The April figure was revised down from an initial report of 8.06 million.
Labor Market Steadies
Economists surveyed by Bloomberg had predicted 7.95 million openings for May. This unexpected rise in job openings comes as the labor market has come under closer scrutiny in recent weeks. Rising weekly jobless claims and a steady increase in the unemployment rate have led to concerns that the labor market may be weakening. However, the new data suggests that any significant downturn may still be some way off.
The Job Openings and Labor Turnover Survey also reported 5.8 million hires in May, a slight increase from April. The hiring rate remained unchanged at 3.6%. The quits rate, which indicates worker confidence, held steady at 2.2%.
Job Openings to Unemployed Workers Ratio
The ratio of job openings to unemployed workers remained steady at 1.2, aligning with pre-pandemic levels. This supports the notion that the labor market is normalizing rather than cooling off completely.
San Francisco Fed President Mary Daly, in a speech on June 24, noted that the labor market is moving towards a point where a “benign” slowdown might be less likely. Daly indicated that further declines in job openings would likely coincide with an increase in the unemployment rate. However, the latest data shows the job openings rate ticked higher to 4.9% from 4.8% the previous month.
“At this point, inflation is not the only risk we face,” Daly said. “We will need to keep our eyes on both sides of our mandate — inflation and full employment — as we work to achieve our goals.”
Upcoming Labor Market Report
The next significant update on the labor market will come with Friday’s nonfarm payroll report from the BLS. Bloomberg data predicts that the report will show 195,000 nonfarm payroll jobs added in June, with the unemployment rate holding steady at 4%.
Bank of America US economist Michael Gapen commented that such a report would indicate a labor market that is “cooling but not cool.”
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