New job openings data shows "steady-as-she-goes" labor market

New job openings data shows "steady-as-she-goes" labor market

Data: Bureau of Labor Statistics; Chart: Courtenay Brown/Axios

America's labor market held steady in May: Employers are hiring cautiously, workers aren't switching jobs as often, and layoffs remain muted.

Why it matters: Employers are hiring less aggressively, but they are not doing the type of widespread layoffs that typically precede a broader downturn.

  • Taken together, new job openings data offers little evidence that the labor market is reigniting or cooling in ways that would be troublesome for the Federal Reserve.

    • What they're saying: "The job market hasn't been dynamic for some time. People looking for new jobs have faced an uphill battle for the past two years," NerdWallet senior economist Elizabeth Renter wrote Tuesday morning.

  • Still: "The number of job openings is encouraging. Openings can be taken as employers' betting on the future — we'd like to think they're opening roles in hopes of filling them."

    • By the numbers: Nearly every major measure of labor turnover barely budged.

  • Job openings held at 7.6 million in May — well below the record highs of the post-pandemic hiring boom, but still above where they stood before COVID.
  • Hiring ticked up only marginally. At 3.3%, the hiring rate is near levels seen in the early 2010s, when the unemployment rate was roughly double what it is now.
  • Job-switching was subdued and layoffs stayed low — a combination that has defined the labor market in recent years.

    • The intrigue: Job openings in health care, a sector that has been carrying the labor market for years, continued to shed openings (-115,000 in May), though it still has among the most vacancies of any sector.

  • Demand, meanwhile, remains soft across many white-collar sectors. Finance and insurance openings fell another 69,000.

    • What to watch: Thursday's employment report will confirm whether hiring trends stayed steady in June.

  • Economists expect that will largely be the case, with the unemployment rate estimated to hold at 4.3% and hiring to cool slightly, relative to May.