U.S. job openings reach a 3 year low. It’s an employer’s market now

Available positions decreased to 8.06 million from a downwardly revised 8.36 million reading in the prior month, the Bureau of Labor Statistics Job Openings and Labor Turnover Survey, known as JOLTS, showed Tuesday. The figure was below all estimates in a Bloomberg survey of economists.

The decline helped lower a ratio closely watched by the Federal Reserve — the number of vacancies per unemployed worker — to the lowest level in nearly three years.

The pullback was fairly broad. Vacancies in health care fell to the lowest in three years, while those for manufacturing dropped to the lowest since the end of 2020. Demand for government jobs also weakened. 

Openings in accommodation and food services decreased as well, possibly reflecting California’s higher minimum wage requirements. Hiring in that industry fell to the lowest since the onset of the pandemic.

Recent data indicate the labor market is cooling, but it’s been gradual through slower hiring rather than outright job cuts. Fed officials hope that trend will continue in order to rein in demand and tame inflation without putting millions of people out of work.Play Video

The rate of hiring and layoffs were both unchanged. While layoffs remain historically low, hiring has slowed down, suggesting companies are comfortable that their staffing levels are appropriate to meet demand.

The so-called quits rate, which measures people who voluntarily leave their job, held at the lowest level since 2020. The recent decline could indicate that people are holding onto their current jobs because they feel less confident in their ability to find a new position.

The ratio of openings to unemployed people eased to 1.2, the lowest since June 2021. The figure — which Fed officials pay close attention to — has eased substantially over the past year. At its peak in 2022, the ratio was 2 to 1.

The data precede Friday’s monthly employment report, which is expected to show the US added 185,000 jobs in May while the unemployment rate held steady.

Some economists have questioned the reliability of the JOLTS statistics, in part because of the survey’s low response rate.