After recent reports that the US labor market had suddenly hit a brick wall, with mass layoffs surging...
... and job openings according to third-party trackers such as Revello showing that total job postings plunged by 22.5%, the biggest change on record...
... many were looking to see if these dismal trends would be confirmed by today's closely watched JOLTs report, arguably the Fed's favorite indicator of labor market softness (or tightness as the case is right now).
Well, for the second month in a row that did not happen, and instead the two-month delayed JOLTS report showed that in May, job openings did plunge by a whopping 427K, the biggest revised one-month drop since the covid crash, to 11.254 million but the drop was from a bigly upward revised 11.681 million in April (originally 11.4 million), the second highest print on record.
According to the report, the largest decreases in job openings were in professional and business services (-325,000), durable goods manufacturing (-138,000), and nondurable goods manufacturing (-70,000).
What is just as remarkable, is that despite one of the biggest drops in job openings on record, the continued tightening in the labor market, there was still a whopping 5.3 million more vacant jobs than unemployed workers in April, nearly double the 5.95 million total unemployed workers), suggesting that the US labor market remains extremely tight - and broken - with the US unofficially sliding into recession.
And with far more job openings than unemployed workers, this meant that in May there were again less than 1 unemployed workers - a near-record low 0.52 to be exact - for every job opening.
With the number of job openings tumbling, it is not surprising that the number of hires also shrank, dropping from a downward revised 6.527MM to 6.489MM in May. According to the BLS, hires decreased in finance and insurance (-40,000).
One last observation comes from the May quits rate: after the number of Americans quitting their job hit an all time high 4.510 million last November, the number of people quitting their jobs has been declining modestly, and in April dropped to 4.270 Million, the lowest since January. Still, the number remains stubbornly high as workers continue to have much of the leverage and are happy to quit their job in search of better paying options elsewhere, hardly the stuff that indicates that wage-price spiral is about to end.