Decline in U.S. Job Openings Cushioned by Stronger Hiring Rate

  • Closely watched quits rate increased to 2.2% from 2.1%
  • Openings has hovered recently at highest level on record

A decline in U.S. job openings in May from close to a record high is still consistent with resilient demand for workers, a Labor Department report showed Tuesday.

Highlights of Job Openings (May)
  • Number of positions waiting to be filled fell by 301k to 5.67m (est. 5.95m) from revised 5.97m in April, acc. to Job Openings and Labor Turnover Survey or JOLTS
  • Hiring rose to 5.47m from 5.04m; hiring rate increased to 3.7% from 3.5%
  • 3.22m Americans quit their jobs, up from 3.04m; quits rate rose to 2.2% from 2.1%
  • Layoffs edged up to 1.66m from 1.61m

Key Takeaways

Fewer help-wanted signs in May were possibly a sign some hiring managers are awaiting more clarity on tax changes and the fiscal policy outlook before expanding employment. At the same time, hiring picked up in May and other reports show companies remain reluctant to fire workers amid the shortage of qualified workers in the tightening job market. Figures released last week showed payrolls jumped more than forecast in June, while the unemployment rate edged up to 4.4 percent from a 16-year low as Americans came off the sidelines to join the labor force.

The JOLTS report also showed a rise in the number of people quitting their job, considered a gauge of workers’ willingness to voluntarily leave because they’re confident of finding a better job. That bodes well for faster wage growth, which has remained elusive in recent years. The quits rate is among indicators of labor-market slack that Federal Reserve Chair Janet Yellen monitors.

Other Details

  • There were 1.2 unemployed people vying for every opening in May, compared with 1.9 people when the recession began at the end of 2007
  • Manufacturing, information services, construction and financial activities saw declines in job openings
  • In the 12 months through May, the economy created a net 2.4 million jobs, representing 63.2 million hires and 60.9 million separations
  • Although it lags the Labor Department’s other jobs data by a month, the JOLTS report adds context to monthly payrolls figures by measuring dynamics such as resignations, help-wanted ads and the pace of hiring
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