Topline
Job openings continued to dwindle for the second straight month, while the number of hires and discharges remained steady, according to new data for the month of May from the Bureau of Labor Statistics – showing the country rebounding from the worst of its labor shortage.
Job openings are down, one week after Federal Reserve Chair Jerome Powell said there is “no … [+]
Key Facts
The number of open jobs decreased 6.9% (roughly 427,000) in May to 11.3 million, according to the Bureau of Labor Statistics’ job openings and labor turnover data (JOLTS) released Wednesday, landing above the 11 million openings that economists predicted in a Bloomberg survey.
The largest decreases in open jobs were in professional and business services (325,000), durable goods manufacturing (138,000) and nondurable goods manufacturing (70,000), according to the report.
Areas where openings rose were the retail industry (104,000), as well as hotels and restaurants (73,000) — some of the few industries that saw an increase.
The overall decrease in job openings represents the largest change in the number of vacant jobs since April 2020, a sign that employers are coming out of the ongoing labor shortage fueled by the Covid-19 pandemic.
Hires held steady at 6.5 million, while separations – including quits (4.3 million) and layoffs and discharges (1.4 million) — were down only marginally from April (6 million).
The unemployment rate, meanwhile, remained at 3.6% (390,000) in May, for the third straight month.
Key Background
Worker demand has been on the rise over the past year, as economists grapple with a lingering worker shortage and the effects of the so-called Great Resignation. The peak in the labor shortage came in December, when hires fell to 6.6 million while job openings increased to 10.9 million, according to the Bureau of Labor Statistics. That same month, layoffs hit a record low (1.2 million), a sign that employers were struggling to retain their workforce. The total number of separations – including people quitting and getting laid off – from April 2020 to December shrunk from 11.5 million to just over 6 million, and has remained relatively stable ever since.
Tangent
Several major companies have been in the spotlight over the past month for massive layoffs. Since May, tech startups have laid off roughly 27,000 employees, according to data released last month from jobs tracker layoffs.fyi. One of those layoffs included Tesla, where CEO Elon Musk said he would cut 10% of the company’s workforce. Netflix, Amazon, Peloton, Cameo, Noom and Robinhood have also announced layoffs or temporary hiring freezes, likely a result of increasing inflation.
What We Don’t Know
How the Federal Reserve will address growing inflation. Federal Reserve Chair Jerome Powell told the Associated Press last week there is “no guarantee” the central bank can control runaway inflation without hurting the job market, particularly in the wake of skyrocketing gas, food and chemical prices believed to be a direct result of Russia’s war in Ukraine. Last month, the central bank raised interest rates by 75 basis points, from 1.5% to 1.75% – its largest interest rate hike in 28 years.
Further Reading
Near-Record 4.3 Million Americans Quit Jobs In December As Layoffs Hit Lowest Level Ever (Forbes)
U.S. Posts Disappointing 199,000 New Jobs Last Month—Omicron Surge Could Make It Worse (Forbes)
Source: https://www.forbes.com/sites/brianbushard/2022/07/06/number-of-open-jobs-in-us-fell-in-may—heres-what-it-means-for-the-labor-shortage/