Job Openings, Hiring Slip in June

By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • Hiring in June FELL 1.0 percent from May to 5.7 million
  • Job openings at the end of June FELL 0.5 percent to 7.35 million;
  • The ratio of job openings per unemployed EDGED DOWN to 1.23 in June from 1.25 in April.

Trends:

  • Hiring fell for the second straight month for the first time since last November-December;
  • Hiring in 2019 is on pace to slightly exceed 2018 (0.7 percent) while layoffs are on pace to be about 4 percent lower than 2018;
  • Job openings continued an alternating pattern which began in December: falling in even-numbered months and increasing in odd-number months;
  • The ratio of “quits” to layoffs and discharges remained at 2:0 signaling continued confidence in the labor market with workers leaving jobs confident they can be hired elsewhere.

Data Source: Bureau of Labor Statistics

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Job openings, according to the Bureau of Labor Statistics, fell in most major industry groups in June while unemployment rose as the labor market continues to adjust according to the latest Job Openings and Labor Turnover Survey (JOLTS) report.

Indeed, the ratio of unemployed to job openings – a convenient measure of skills mismatch – fell in only one sector, mining with BLS reporting unemployment of 24,000 compared with 30,000 job openings in June. Mining was the only occupation sector to report a drop in the ration of unemployed to job openings in June.

At the other end of the spectrum, the ratio of unemployed to job opening jumped to 6.1 in June (from 4.6 in May) in the professional and business services sector. Only the trade sector, education/health services, and construction reported rations exceeding 1, meaning more unemployed that job openings.

The mixture is interesting but confirms struggles in the construction and retail trade sectors, both attributable at least in part to the ongoing trade wars sparked by higher US tariffs. Retailers have been especially hard hit and have announced plans this year to close more than 7,500 stores, most of them in discount chains which rely heavily on imported goods.

That said, hiring year-to-date remains robust and on track to exceed 2018 – though barely. Extrapolating JOLTS data suggests 69.3 hires in 2019, up slightly from 68.9 million in 2018. Layoffs and discharges, the extrapolation suggests, will be about 21 million in 2019, down just over 4 percent from the 21.8 million in 2018. That would be the fewest layoffs since 2006, before the 2008 Recession.

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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