US job openings dropped below 10 million in May

By Alicia Wallace, CNN

Minneapolis (CNN) — The number of available jobs in the United States dropped in May after an uptick the month before, the Bureau of Labor Statistics reported Thursday.

Job openings fell to 9.82 million at the end of May, dropping from an upwardly revised 10.3 million in April, according to the BLS’ latest Job Openings and Labor Turnover Survey report.

Economists had projected that openings fell to 9.935 million for May, according to Refinitiv.

The May JOLTS data showed that the number of new hires rose to 6.21 million from 6.1 million, quits jumped up to 4.02 million from 3.77 million and layoffs dipped to 1.56 million from 1.59 million.

The Federal Reserve has been hoping to see more slack in the labor market, since an imbalance between worker demand and supply could cause wages to rise and, ultimately, add upward pressure to inflation. The central bank has tried to tame inflation with 10 consecutive rate hikes, followed by a pause at its June meeting.

Openings have cooled considerably from their 12 million peak in March of last year; however, those and other key labor turnover data points remain far afield of their pre-pandemic levels.

At the end of May, openings were 40% higher, layoffs were 21% fewer, and quits were 15% above February 2020 levels, said Julia Pollak, chief economist for online job site ZipRecruiter.

“This is still a tremendously strong labor market,” she said.

With quits popping back up above 4 million for the first time since December, workers continue to have leverage in this job market, she added.

“It definitely suggests that employers continue to be in a bit of a bind and have trouble recruiting and retaining workers,” Pollak said, adding that this stretch of decades-high inflation has played its part. “Many companies have given workers large raises; but in inflation-adjusted terms, they’ve actually seen their real earnings fall, and workers are still looking for higher-wage jobs that will restore their purchasing power.”

The latest JOLTS report also reinforces other recent labor market data that suggests employers are trying to hold on to workers rather than pare down headcounts.

“There was this correction based on over-hiring during the pandemic, and I think we are seeing that smooth out,” said Layla O’Kane, senior economist for labor market analytics firm Lightcast, during a LinkedIn Live webinar on Thursday. “In the JOLTS report, we have never seen layoffs spread across the whole economy in the last six months. As much as there’s been a lot of media talk about the tech sector layoffs, I do think those are nudging down, based on this report.”

“And we’re not seeing layoffs ricochet into other areas of the economy, which is something we’ve … worried about,” she added.

That trend was also seen Thursday in a separate report that showed layoff activity had slowed considerably from the past few months.

US employers announced 40,709 job cuts in June, the lowest monthly total since October 2022, according to data released Thursday morning by outplacement firm Challenger, Gray & Christmas.

Excluding the deep job losses seen in 2020, the 458,209 layoff total announced in the first half of this year is the highest January-to-June total since 2009, when 896,675 cuts were announced, according to the Challenger report for June. The technology industry continues to account for the lion’s share of the cuts.

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