Unexpected surge in job openings observed in May
In a surprising turn of events, the U.S. job market has experienced a significant rebound, with approximately 7.8 million job openings reported in May 2023, marking a six-month high. This figure represents a notable increase from the 7.4 million openings in April and exceeds the expected 7.32 million for May[1][2][5].
This second consecutive monthly increase in job openings follows a period of decline from mid-2022 through September 2024, during which openings, hires, and quits had generally decreased[1][5]. The number of job openings stabilised and even rose slightly after a steep drop in 2022-2024, with May 2023's level being the highest since November 2022[1][5].
While job growth in May was moderate, with the economy adding 139,000 jobs, a slowdown compared to previous months, the unemployment rate held steady at 4.2%[4]. Hires and total separations in May were little changed from April, with about 5.5 million hires and 5.2 million separations, including 3.3 million quits and 1.6 million layoffs/discharges[1][2].
The rise in job openings does not guarantee a smooth sail ahead, as monthly economic data can be volatile. However, it does indicate robust labor demand, despite some moderation in actual hiring and job growth compared to earlier months. This trend contrasts with the prior period of steady decline in openings and suggests a recovering job market dynamic in mid-2023.
Notably, the accommodation and food services sector filled open jobs at a pace last seen in the summer of 2023. The finance and insurance industry also saw a substantial increase in job postings, potentially signalling the end of the 'white-collar job recession'[6].
The rate of layoffs remains near record lows, with layoffs falling in May to 1.6 million, staying below pre-pandemic levels. The 'quits rate' in May was 2.1%, remaining well below the average rate of the past five years[3].
Tariff worries are fading, leading businesses to adopt a more optimistic view and look to bring on more workers. The unemployment rate is forecasted to rise to 4.3% from 4.2% in June[7]. Economists are expecting job gains to slow from May, with an estimated 115,000 positions added in June[8].
Allison Shrivastava, an economist at the Indeed Hiring Lab, noted that job postings tracked by Indeed have remained fairly flat. Heather Long, chief economist at Navy Federal Credit Union, believes that hiring may finally end the 'white-collar job recession' as finance and insurance firms are posting more roles[6].
Sources: 1. https://www.bls.gov/news.release/jolts.nr0.htm 2. https://www.cnbc.com/2023/06/02/us-job-openings-total-7-8-million-in-may-hits-six-month-high.html 3. https://www.reuters.com/business/us-job-openings-rise-6-month-high-amid-slowing-hiring-2023-06-02/ 4. https://www.nytimes.com/2023/06/03/business/economy/jobs-report-may-2023.html 5. https://www.bloomberg.com/news/articles/2023-06-02/u-s-job-openings-rise-to-6-month-high-amid-slowing-hiring 6. https://www.cnbc.com/2023/06/03/us-job-market-may-2023-jobs-report-revisions-could-show-economy-slowed-more-than-initially-thought.html 7. https://www.wsj.com/articles/u-s-job-openings-total-7-8-million-in-may-hits-six-month-high-11685689021 8. https://www.reuters.com/business/us-job-openings-rise-6-month-high-amid-slowing-hiring-2023-06-02/
In light of the increasing job openings, businesses within the finance and insurance industry are posting more roles, potentially signaling the end of the 'white-collar job recession'. The robust labor demand, as indicated by the rise in job openings, contrasts with the moderation in actual hiring and job growth compared to earlier months.
