U.S. Job Openings Decline While Remaining Elevated

U.S. job postings declined from their previous record, but they were still historically high. That suggests little relief for employers trying to recruit and retain employees.

The number of available positions decreased to 11.4 million in the month from an upwardly revised 11.9 million in March, the Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS, showed Wednesday. A Bloomberg survey of economists forecasted that there would be 11.35 million open positions.

JOLTS is now a key indicator for tightness in US labor markets. Federal Reserve Chair Jerome Powell often refers to it as a sign that the economy can handle higher interest rates and not see a rise in unemployment. The goal of policy makers is to decrease demand for labor. This will help lower inflation and cool wage growth, but not tip the economy into recession.

Labor demand is strong, despite a slightly improved number of vacant positions. Firms are struggling to hire from a limited pool of workers, highlighting the mismatch in labor supply and demand that’s kept wage growth high. There are some signs that such gains might be reaching a peak, which is a good sign for both the Fed and American workers.

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In April, 4.4 Million Americans left their jobs. This is little different from the previous month. At 2.9%, the quits rate was the same as last month. It measures voluntary job-leaving behavior in proportion to total employment.

In April there were 1.9 jobs per unemployed worker, slightly less than March. Fed Governor Christopher Waller referenced the closely watched ratio in a speech earlier this week, in which he also said that tighter policy won’t lead to much of an increase in unemployment since demand for workers will still be strong, just less so.

Although layoffs dropped to an all-time low of 66 percent in April, separate data from Labor Department shows that there has been an increase in unemployment insurance applications in recent weeks. The level of hiring remained elevated.

This was due to drops in retail trade, accommodation and food service and health care. Notable increases were seen in industries such as transport, warehousing and utilities, as well as manufacturing.

The data precede Friday’s monthly jobs report, which is currently forecast to show the U.S. added 325,000 payrolls in May and the unemployment rate fell to 3.5%, which would match the lowest since 1969.

Assistance from Chris Middleton & Olivia Rockeman

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