Job openings dipped in May, a sign of continued cooling
The news
Job openings fell in May while the number of workers quitting their jobs increased, the Labor Department reported Thursday.
There were 9.8 million job openings in May, down from 10.3 million in April, according to the Job Openings and Labor Turnover Survey, known as JOLTS. The report shows that the labor market maintains good opportunities for employees, but it is losing momentum.
The exit rate, which is often used to measure a worker’s confidence in the labor market, increased in May, particularly in the health care, social care and construction industries. An increase in quitting often signals workers̵[ads1]7; confidence that they will be able to find other work, often better paid. But fewer workers are quitting their jobs than they did last year at the height of what was dubbed the “great layoff.”
Layoffs were relatively steady after declining in previous months, a sign that employers are hesitant to let workers go.
Why it matters: The Fed’s next move on interest rates is unclear.
Federal Reserve policymakers have worried about the strength of the labor market as they continue to grapple with stubbornly high inflation.
The Fed chose to leave interest rates unchanged at the June meeting after 10 increases in a row. The JOLTS report is one of several factors that will inform the Fed’s next decision on interest rates.
Some economists worry that the Fed will push interest rates too high and trigger a recession.
Background: A cooling labor market retains underlying strength.
The labor market has remained robust amid the Fed’s efforts to slow the economy, but has shown signs of cooling in recent months. Jobs were down for three months in a row until April.
Initial jobless claims, also released by the Labor Department on Thursday, rose in the week ending July 1 from the previous week, although the four-week trend shows initial claims falling.
What’s next: The jobs report from June is due on Friday.
The June employment report — another indicator the Fed is watching closely — will be released by the Labor Department on Friday. Economists surveyed by Bloomberg expected the report to show a gain of 225,000, down from the initial reading of 339,000 for May.
Unemployment rose to 3.7 per cent in May, from 3.4 per cent a month earlier. Although still historically low, the rate was the highest since October and exceeded analysts’ expectations.
Fed policymakers will hold their next meeting on 25-26. July.
