US job openings unexpectedly grew in May, reflecting a still resilient labor market | CNN Business (2024)

US job openings unexpectedly grew in May, reflecting a still resilient labor market | CNN Business (1)

Job seekers attends the JobNewsUSA.com South Florida Job Fair held at the Amerant Bank Arena on June 26, 2024, in Sunrise, Florida.

CNN

The number of available jobs in the US unexpectedly grew in May, signaling continued resilience in the nation’s labor market.

Job openings jumped higher to 8.14 million in May, from a downwardly revised 7.91 million in April, according to the Bureau of Labor Statistics’ latest Job Openings and Labor Turnover Survey (JOLTS) report released Tuesday.

Economists had expected openings would fall to 7.91 million, according to FactSet consensus estimates.

Despite the uptick in job postings, which can be quite volatile, May’s JOLTS report marked a significant milestone for the US labor market: The ratio of job openings to those who are unemployed fell to 1.22 available jobs per job seeker, matching the figure seen in February 2020, a month prior to the pandemic lockdowns that shocked the global economy.

That ratio has been steadily moving lower since hitting a record 2.0 in March 2022, JOLTS data shows.

“The report was another sign that the labor market is holding firm,” Robert Frick, corporate economist with Navy Federal Credit Union, said in a statement issued Tuesday. “So far there are no indications that job growth will flag this year, so consumer spending power will continue to increase and the expansion looks solid.”

Industries seeing the biggest increase in openings included manufacturing (specifically durable goods) and government (federal, state and local). Those seeing the greatest pullback from April included real estate and leisure and hospitality, BLS data shows.

Pendulum swings away from workers

Other seasonally adjusted measures of labor turnover showed continued stability in the US jobs market, which has gradually cooled in recent months while remaining historically strong.

The estimated number of hires moved up to 5.76 million from 5.62 million in April; layoffs and separations bounced higher to 1.65 million in May, up from 1.54 million; while the number of voluntary quits inched upward to 3.46 million from 3.45 million.

While both hires and job openings rates (as a percentage of total employment) ticked higher for May, the quits rate and layoffs rate were unchanged.

Economists have been closely watching the quits rate — which has held steady at 2.2% for seven months running — as it serves as a signal for workers’ willingness to test the labor market’s waters. When people switch jobs, that typically can correlate to bigger pay bumps, which in turn potentially could make it more difficult to rein in inflation.

A worker holds a tray of fried chicken inside a Popeye's Louisiana Kitchen Inc. restaurant location in Latham, New York, US, on Thursday, April 25, 2024. Angus Mordant/Bloomberg/Getty Images Related article US employers want more part-time workers. Here’s what that means

Job-switchers’ pay raises have pared down significantly from the “Great Resignation” period, according to a newly released analysis from Bank of America.

Economists there analyzed internal customer data and found that median wage hikes are about half the size they were during the height of pandemic-era job changes.

In fact, the median pay raises are just 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 pre-pandemic … but the pay raises they’re getting when they make those moves is a degree softer,” he said. “That sort of suggests that the pendulum has swung slightly more in favor of firms and away from workers.”

Labor market steady or a turning point?

The labor market appears to be at a crossroads, Nick Bunker, Indeed Hiring Lab’s head of economic research, wrote in commentary posted Tuesday.

“The words ‘little changed’ were repeated no fewer than a half dozen times in the May JOLTS release, and virtually every key indicator tracked showed limited notable movement, either up or down,” Bunker wrote. “This short-run stability is a good thing. But the question remains if this period of calm can continue or if more unsteady times are on the horizon.”

“This current level of job openings is consistent with a healthy, sustainable and balanced market, but any continued declines below these current levels will quickly become more worrisome,” he wrote.

It may take an interest rate cut to ensure employers’ demand for workers doesn’t tumble too far, he added.

Federal Reserve officials still broadly believe the job market remains on solid footing, which is allowing central banker to comfortably keep interest rates perched at a 23-year high as they await more evidence that inflation is under control.

But some Fed officials have noted that the job market has lost momentum recently and that it’s highly unclear whether it will continue to hold steady or weaken further.

“If employment starts falling apart or if theeconomybegins to weaken, which you’ve seen some warning signs, you’ve got to balance that off with the progress you’re making on the price front,” Chicago Fed President Austan Goolsbee told 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 rising,” he said.

More jobs data coming Friday

In May, the US unemployment rate increased to 4%, a rate that hadn’t been seen since January 2022. Still, job growth remained strong in May, coming in at an estimated net gain of 272,000.

Economists largely expect that job gains cooled off in June. As of Tuesday, FactSet consensus estimates are for a 189,000 net gain.

First-time claims for unemployment benefits (considered a proxy for layoffs) have drifted higher in recent weeks, landing in line with pre-pandemic averages.

“They’re still low, historically speaking, but they are up between the May and June payroll survey reference months, so we do think we could see some slowdown in job growth over the month,” Marisa DiNatale, head labor economist 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.

CNN’s Bryan Mena contributed to this report.

US job openings unexpectedly grew in May, reflecting a still resilient labor market | CNN Business (2024)

FAQs

US job openings unexpectedly grew in May, reflecting a still resilient labor market | CNN Business? ›

In May, the US unemployment rate increased to 4%, a rate that hadn't been seen since January 2022. Still, job growth remained strong in May, coming in at an estimated net gain of 272,000.

Is the US workforce growing? ›

The labor force is projected to grow over the next 10 years at an average annual rate of 0.5 percent, a slower rate than in recent decades.

How has the pandemic affected the job market? ›

The recession induced by the coronavirus disease 2019 (COVID-19) pandemic resulted in steep job losses, pushed the unemployment rate to a high of 13.0 percent in the second quarter of 2020, and caused many people to leave the labor force.

Is the US in an employment crisis? ›

America is dealing with a massive labor shortage, and it's sending shockwaves throughout the country. Thousands of U.S. businesses have cut their hours or completely closed shop because they can't fill their open positions.

Is there a growth or decline in industry employment? ›

Industry Employment

Total employment is projected to grow 0.3 percent annually from 164.5 million in 2022 to 169.1 million in 2032.

Is the US jobs market still booming? ›

The U.S. labor market, a key indicator of the economy's strength, remains in a healthy state, but is showing signs of slowing, based on the June jobs report from the U.S. Bureau of Labor Statistics.

Is the US labor market improving? ›

The labor market is tight, but it could be easing off slightly according to Feroli. “The labor market is now becoming less tight — not by a lot, though,” he said. The unemployment rate rose in February after a 54-year low of 3.4% was reached in 2023, though it edged back down to 3.8% in March.

What is causing the US labor shortage? ›

Why are we in a worker shortage? At the height of the pandemic, more than 120,000 businesses temporarily closed, and more than 30 million U.S. workers were unemployed. Since then, job openings have steadily increased while unemployment has slowly declined. In 2023, employers ended up adding 3.1 million jobs.

Why is it so hard to get a job now? ›

A trio of factors: Layoff spillover, AI and market re-correction. Some experts say that companies and workers are having a hard time meeting each others' needs right now. But Goldstein pinpoints three specific factors fueling the job search drag.

Why are so many people not working? ›

Many companies had to downsize or close, millions retired early, and the average employee sought more freedom and flexibility in their working schedules. All of this resulted in a lower labor force participation rate where less Americans were working.

What industry is losing the most workers? ›

For example, the leisure and hospitality industry has experienced the highest quit rates of all industries, with the accommodation and food services subsector of this industry experiencing a quit rate consistently around 4.5 percent since July 2022.

What jobs are projected to decline? ›

Fastest declining occupations
2022 National Employment Matrix title2022 National Employment Matrix codeEmployment, 2032
Word processors and typists43-902227.0
Watch and clock repairers49-90641.4
Roof bolters, mining47-50431.3
Cutters and trimmers, hand51-90315.9
28 more rows
Apr 17, 2024

What is the main cause of workforce decline? ›

The decline in the labor force participation rate – the number of Americans either working or looking for work as a percentage of the population – is primarily due to the aging population and other structural factors, rather than cyclical weaknesses, and is expected to continue.

Is the workforce increasing or decreasing? ›

An aging population is the reason for California's long-term labor force declines. Labor force participation has fallen from over 67 percent in 2000, to near 62 percent today.

Is unemployment rising or falling in the US? ›

Unemployment Rate in the United States increased to 4.10 percent in June from 4 percent in May of 2024. Unemployment Rate in the United States is expected to be 4.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations.

How bad is the labor shortage in the US? ›

We hear every day from our member companies—of every size and industry, across nearly every state—that they're facing unprecedented challenges trying to find enough workers to fill open jobs. Right now, the latest data shows that we have 8.5 million job openings in the U.S. but only 6.5 million unemployed workers.

Is US productivity increasing? ›

US labor productivity has enjoyed a period of renewed growth over the past year, interrupting a nearly twenty-year decline: the 2.7 percent productivity growth in 2023 outpaces the 1.5 percent annual average since 2004, and it nearly matches the 2.9 percent pace seen during the country's last productivity surge in the ...

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