Job Openings Dip in May But Remain Above Unemployment; Hires at 17+ Year High

 By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • Job openings at the end of May SLIPPED 3.0 percent to 6.4 million from April but remained above unemployment in May of 6.1 million;
  • The number of hires ROSE 3.1 percent to 5.75 million in May
  • The ratio of job openings per unemployed ROSE to 1.09 in May;

Trends:

  • Job openings exceeded unemployed for the third month in a row;
  • The number of hires in May reached its highest level since January 2001;
  • The ratio of quits to layoffs – a sign of confidence in the labor market – was 2.2 to one in May meaning more than twice as many people left jobs voluntarily as were laid off;

Data Source: Bureau of Labor Statistics

Image result for job openings

The JOLTS (Job Openings and Labor Turnover Survey) report for May showed a continuation of the trend we’ve seen in the labor market for several months with available jobs remaining unfilled as a skills mismatch among workers continues.

The job openings data tracks new jobs as reported in the Bureau of Labor Statistics monthly Employment Situation report. Indeed, while the monthly report is a snapshot of the labor market, the JOLTS data resemble more of a moving picture.

And, that picture has been generating rave reviews, certainly when converted to a six-month moving average to smooth some of the volatility in the monthly numbers.

The JOLTS report of job openings by industry also suggests an uptick in reported hourly and weekly earnings as some of the higher paying industry sectors: business and professional services, construction and health and education services showed relatively high ratios of unemployed to job openings. For example, the ratio was 3.6 to one in professional and business services, more than double the 1.7 to one ratio in April.

In the construction sector as well, the ratio of job openings to unemployed was 1.7 to one in May, up from 1.5 to one in April.

At the other end of the scale, the lower-paying leisure and hospitality sector had an opening to unemployed ratio of 0.5 to one in May, down slightly from 0.6 to one in April. Trade (encompassing both retail and wholesale trade) had a ratio of 0.7 to one in May down from A[til when there were 1.2 job openings for every person unemployed in that sector.

The JOLTS report projected the nation was on a pace for just under 67 million hires in 2018, up about 2.6 percent over 2017 and the highest total since the BLS began publishing JOLTS data in 2000.

The May JOLTS report suggest a pace for the number of layoffs and discharges in 2018 of 19.8 million, down from the 20.6 million layoffs and discharges in 2017 and the lowest total since the JOLTS data has been published.

You can hear Mark Lieberman on P.O.T.U.S Morning Briefing (Sirius 124) every Friday at 6:20 am Eastern Time. Follow him on Twitter at @foxeconomics.

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