Job openings came in higher than expected at 7.7 million for the month of May.
Transcript:
Caroline Woods: I first want to get your reaction to the JOLTS report. Job openings came in higher than expected at 7.7 million for the month of May. Yet at the same time, we saw a decline in hiring. So what does that tell us about the current labor market.
Brian Jacobsen: Yeah, the JOLTS report was a little jolting to see that big increase in the number of job openings. But as you point out, the level of hirings isn’t really changing all that much. I think that it really feeds into the narrative that Chair Powell has been talking about, how the economy seems to be stuck in this uncomfortable equilibrium of this no higher but yet no fire situation. Most of the job openings that we saw. Accommodation and food services. So some of that could be seasonal adjustments. Or it could be due to the employers letting attrition run a little too far. And so attrition is just when they let people leave and they don’t necessarily replace them. And now they might be scrambling to do that. So I think that the labor market as a whole is looking softer.
Caroline Woods: We talked about the 7.7 million job openings. So you say that reflects continued softness in the labor market, but are they still indicative of a healthy jobs market.
Brian Jacobsen: It’s healthy, but I think getting a little bit of a case of the sniffles might be a way to think about it. So it’s still healthy, but not as healthy as it used to be. And I think that one of the indicators I like to look at with JOLTS is comparing the quits rate to the layoffs rate, and we know that the quits rate moved up from 2% to 2.1% And so people are getting a little bit more confident, maybe temporarily, to actually just jump ship. And that is a sign of a healthier labor market. When you see that the quits rate is actually beginning to increase, but the layoffs rate is historically low. It’s at a very low level. And so it becomes a question of which one kind of moves first. I think that maybe that layoffs rate is going to pick up, at least in the short term. Before then, we see the hires rate begin to show a little bit more strength. So perhaps it is just a temporary case, maybe a little bit of a seasonal cold that the labor market might be experiencing here as opposed to something more protracted.
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