Job openings unexpectedly rose in May, defying expectations of further labor market cooling following last month’s report showing U.S. job openings at a three-year low.
The Bureau of Labor Statistics released new data on Tuesday indicating there were 8.14 million job openings at the end of May, up from 7.92 million in April. April’s figure was revised down from the initially reported 8.06 million. Economists surveyed by Bloomberg had anticipated 7.95 million openings in May. This data comes amid increasing scrutiny of the labor market, as rising weekly jobless claims and a steady uptick in the unemployment rate have economists concerned about potential underlying weaknesses in an otherwise strong labor market.
However, Tuesday’s data did not suggest an imminent downturn.
The Job Openings and Labor Turnover Survey (JOLTS) showed 5.8 million hires in May, a slight increase from April, with the hiring rate remaining steady at 3.6%. The quits rate, an indicator of worker confidence, also held steady at 2.2%.
The ratio of job openings to unemployed workers remained at 1.2, consistent with pre-pandemic levels, suggesting that the labor market is normalizing rather than significantly cooling.
In a speech on June 24, San Francisco Fed President Mary Daly noted that the labor market is approaching a point where a “benign” slowdown is less likely, emphasizing that further declines in job openings would likely coincide with an increase in the unemployment rate.
May’s data, however, did not support this concern as the job openings rate increased slightly to 4.9% from 4.8% in April.
“Inflation is not the only risk we face,” Daly said. “We need to focus on both inflation and full employment to achieve our goals.”
The next major labor market update will come on Friday with the release of the nonfarm payroll report from the Bureau of Labor Statistics. This report is expected to show an addition of 195,000 nonfarm payroll jobs in June, with unemployment holding steady at 4%, according to Bloomberg data.
Bank of America U.S. economist Michael Gapen suggested that such a report would indicate a labor market that is “cooling but not cool.”