11.3 Million Job Openings, 4.3 Million Quits Show Labor Market Remains Red Hot

The U.S. labor market remained blazingly hot in May.

Job openings dipped slightly in May to 11.3 million at the end of the month, according to the Labor Department’s Job Openings and Labor Turnover Survey. Economists had forecast openings to fall to 11 million.

The survey’s estimate for April was revised up from 11.4 million to 11.7 million. The all-time high was hit in March of this year at 11.9 million.

Job openings have exploded higher in the wake of the pandemic and lockdowns.  There were about 1.9 jobs for every unemployed person in May, a near record high and unchanged from April.

The labor market remains a source of strength for a U.S. economy that is increasingly showing signs of softness. Consumer spending was weaker than thought in the first three months of the year and contracted in inflation adjusted terms in May. Construction spending has stalled. Many reports on manufacturing indicate a contraction or very low growth, although on Tuesday a report on factory orders came in stronger than expected.

Despite the very high demand for workers, wages have not kept up with inflation. Real average hourly earnings for all employees decreased 0.6 percent from April to May. Compared with 12-months earlier, real wages are down a sharp three percent.

Americans are voluntarily quitting their jobs in record numbers. In May, 4.3 million people left their job on their own volition, around the same amount in April. The quits rate declined to 2.8 percent, down from 2.9 percent in February through April. A high quits figure is regarded as a sign that workers are confident they can easily find a new job.

The total number of hires was close to unchanged at around 6.5 million.

 

The quits rate in accommodation and food services, an area hit particularly hard during the pandemic climbed to 5.7 percent from 5.5 percent a month earlier. The number of quits in the sector climbed to 765,000 from 730,000. Hires in the sector climbed 21,000 to 965,000. Openings jumped to 1.4 million from 1.327 million.