(Bloomberg) -- US job openings came in above forecast last month after May’s reading was revised higher, defying a recent trend of a gradual softening in the labor market.
Available positions edged lower to 8.18 million from a upwardly revised 8.23 million reading in the prior month, the Bureau of Labor Statistics Job Openings and Labor Turnover Survey, known as JOLTS, showed Tuesday. The June figure exceeded most estimates in a Bloomberg survey of economists.
The report still shows there’s solid demand for workers even though employers have pulled back on hiring and wage growth has slowed. The unemployment rate rose for a third straight month in June, consistent with a recent run-up in the number of Americans receiving jobless benefits.
That softness, along with easing inflation, is why many economists expect Federal Reserve Chair Jerome Powell to signal the central bank will start cutting interest rates soon at the conclusion of its two-day meeting Wednesday. Forecasters also see the pace of job growth moderating further with Friday’s release of the July employment report.
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“The June JOLTS report offers yet another clear signal that the labor market is not deteriorating in the fashion that an increasing chorus of doom-and-gloomers are asserting,” Stephen Stanley, chief US economist at Santander Capital Markets, said in a note.
Treasury yields rose after the report. A separate release showed US consumer confidence rose in July on an improved outlook for the economy and labor market.
What Bloomberg Economics Says...
“We’re skeptical this level of job openings will support a persistently elevated hiring pace. Skills mismatch and licensing requirements can buoy the headline number of job openings even as overall demand for labor declines.”
— Stuart Paul. To read the full note, click here
The number of vacancies per unemployed worker, a ratio the Fed watches closely, held at 1.2, in line with the level prior to the pandemic. At its peak in 2022, the ratio was 2 to 1.
Trade, accommodation and food services as well as state and local government were among industries that added the most open positions in June. Vacancies in manufacturing declined by the most in two years.
Hiring eased to lowest rate since the onset of the pandemic, dragged down by leisure and hospitality as well as professional and business services. The rate of layoffs dropped to the lowest in two years.
“A ‘limited hiring, limited firing’ labor market could be a new equilibrium, but at some point, hiring needs to level off,” said Nick Bunker, Indeed Hiring Lab’s economic research director for North America. “Unfortunately, we haven’t reached that plateau yet.”
The so-called quits rate, which measures people who voluntarily leave their job, stayed at 2.1%, holding near the lowest levels since 2020. That suggests that people are less confident in their ability to find a new position than they were a couple years ago.
Some economists have questioned the reliability of the JOLTS statistics, in part because of the survey’s low response rate.
--With assistance from Chris Middleton.
(Adds economists’ comments)
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