CNN
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The number of U.S. job openings rose unexpectedly in May, signaling continued stability in the nation’s labor market.
Job openings rose to 8.14 million in May, from a downwardly revised 7.91 million in April, according to the latest Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS) report released Tuesday. .
Economists had expected openings to fall to 7.91 million, according to FactSet consensus estimates.
Despite the increase in job postings, which can be quite volatile, The May JOLTS report was noted an important milestone for the US labor market: The ratio of job openings to the unemployed fell to 1.22 jobs available to job seekers, matching the first figure in February 2020, a month before the pandemic lockdowns that shook the global economy.
That ratio has been consistently lower since hitting a record high of 2.0 in March 2022, JOLTS data show.
“The report was another sign that the labor market is staying strong,” said Robert Frick, corporate economist with Navy Federal Credit Union, in a statement released Tuesday. “So far there is no indication that job growth will pick up this year, so consumer spending power will continue to grow and expansion looks solid.”
Other seasonally adjusted measures of labor turnover showed continued stability in the US labor market, which has cooled gradually in recent months while remaining historically strong.
The estimated number of jobs rose to 5.76 million from 5.62 million in April; layoffs and separations rose to 1.65 million in May, from 1.54 million; while the number of voluntary departures increased to 3.46 million from 3.45 million.
While the rates of hiring and job openings (as a percentage of total employment) rose higher for May, the rate of departures and the rate of layoffs remained unchanged.
Economists have been closely watching the exit rate — which has held steady at 2.2% for seven straight months — as it serves as a signal of workers’ willingness to test the labor market waters. When people change jobs, this can usually be associated with larger wage increases, which in turn can make it harder to contain inflation.
Wages for job-changers have declined significantly since the Great Recession, according to a newly published analysis by Bank of America.
Economists there analyzed internal client data and found that average wage increases are about half the size they were during the peak of pandemic-era job changes.
In fact, average wage increases are slightly below 2019 levels, David Tinsley, senior economist at the Bank of America Institute, told CNN.
“People are still moving between jobs at a slightly faster rate than they were before the pandemic … but the wage growth they’re getting when they make those moves is a more modest rate,” he said. “That kind of suggests that the pendulum has swung a little bit more in favor of firms and away from workers.”
The job market appears to be at a crossroads, Nick Bunker, head of economic research at Indeed Hiring Lab, wrote in commentary posted Tuesday.
“The words ‘little changed’ were repeated no less than half a dozen times in the May JOLTS release, and nearly every key indicator tracked showed limited apparent movement, up or down,” Bunker wrote. “This short-term stability is a good thing. But the question remains whether this period of calm can continue or whether more volatile times are on the horizon.”
“This current level of job openings is consistent with a healthy, stable and balanced market, but any sustained decline below these current levels will quickly become more worrisome,” he wrote.
An interest rate cut may be needed to ensure that employers’ demand for workers does not fall too far, he added.
Federal Reserve officials still widely believe the labor market remains on a solid footing, which is allowing central bankers to comfortably keep interest rates at a 23-year high as they wait for more evidence that inflation is under control. .
But some Fed officials have noted that the labor market has lost momentum recently and that it is very unclear whether it will continue to hold steady or weaken further.
“If employment starts to fall apart or if the economy starts to weaken, which you’ve seen some warning signs of, you have to balance that with the progress you’re making on the price front,” Chicago Fed President Austan Goolsbee said. Bloomberg TV on Tuesday during a conference hosted by the European Central Bank in Sintra, Portugal.
“The unemployment rate is still quite low, but it has been increasing,” he said.
In May, the U.S. unemployment rate rose to 4%, a rate not seen since January 2022. However, job growth remained strong in May, reaching an estimated net gain of 272,000.
Economists largely expect job gains to cool in June. As of Tuesday, FactSet consensus estimates are for a net gain of 189,000.
First-time claims for jobless benefits (considered a proxy for layoffs) have risen more in recent weeks, falling in line with pre-pandemic averages.
“They’re still low, historically speaking, but they’re between the reference months of the May and June payrolls surveys, so we think we could see a slowdown in job growth during the month,” Marisa DiNatale, chief economist of work for Moody’s Analytics. , told CNN in an interview.
The Bureau of Labor Statistics will release the latest jobs report at 8:30 a.m. ET on Friday.