America’s red-hot job market just won’t quit

The US labor market demonstrated resilience in May as the number of available jobs unexpectedly increased, reaching 8.14 million, according to the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS) report. This figure surpassed the revised April figure of 7.91 million and defied economists’ expectations of a decline.

The ratio of job openings to unemployed individuals fell to 1.22 available jobs per job seeker, mirroring the pre-pandemic level in February 2020. This ratio has been steadily decreasing since it peaked in March 2022.

Other seasonally adjusted measures of labor turnover also showed stability in the US jobs market. The estimated number of hires increased to 5.76 million, while layoffs and separations rose to 1.65 million. The number of voluntary quits slightly increased as well.

The quits rate, which indicates workers’ willingness to change jobs, has remained steady at 2.2% for seven months. However, the pay raises for job-switchers have decreased significantly from the “Great Resignation” period and are now below 2019 levels.

Nick Bunker, Indeed Hiring Lab’s head of economic research, noted the short-term stability in the labor market but expressed uncertainty about its future. He suggested that continued declines in job openings could be concerning.

The Federal Reserve officials generally believe the job market remains strong, allowing them to maintain interest rates at a 23-year high. However, some officials have expressed concern about the job market’s recent slowdown and its potential future trajectory.

In May, the US unemployment rate increased to 4%, a rate not seen since January 2022. Despite this increase, job growth remained strong, with an estimated net gain of 272,000 jobs. Economists predict that job gains may have slowed down in June.

First-time claims for unemployment benefits have risen in recent weeks, aligning with pre-pandemic averages. The Bureau of Labor Statistics is set to release the latest jobs report at 8:30 a.m. ET on Friday.

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