The Labor Department reported Thursday that job openings declined in May while the number of workers who quit their jobs increased.
There were 9.8 million job vacancies in May, down from 10.3 million in April, according to Employment Opportunities and Labor Turnover Survey, better known as JOLTS. The report shows that the labor market maintains ample opportunities for workers, but is losing momentum.
The quit rate, which is often used to measure worker confidence in the job market, rose in May, particularly in the health care, social assistance and construction industries. A high quitting rate often indicates workers’ confidence that they will be able to find other work, often with better pay. But fewer workers quit their jobs than they did last year at the height of what has been called the “great resignation”.
Layoffs have been relatively flat after declining in previous months, a sign of employers’ reluctance to let go of workers.
Why it matters: The Fed’s next move on interest rates is unclear.
Federal Reserve policymakers worry about the strength of the labor market as they continue to tackle stubbornly high inflation.
The Fed chose to leave interest rates unchanged at its June meeting after 10 consecutive increases. The JOLTS report is one of many factors that will guide the Fed’s next interest rate decision.
Some economists worry that the Fed will raise interest rates too high and lead to a recession.
Background: The cold job market retains fundamental strength.
The job market has remained resilient amid the Fed’s efforts to slow the economy, but has shown signs of slowing in recent months. Employment opportunities fell for three consecutive months through April.
first Unemployment claimsalso released by the Labor Department on Thursday, rose higher in the week ended July 1 than the previous week, although the four-week trend shows initial claims declining.
What’s next: The jobs report for June comes out on Friday.
On Friday, the Labor Department will release its employment report for June – another indicator the Fed is watching closely. Economists polled by Bloomberg expect the report to show a gain of 225,000, down from a preliminary reading of 339,000 for May.
The unemployment rate jumped to 3.7 percent in May from 3.4 percent in the previous month. Although the rate remains historically low, it was the highest since October and exceeded analysts’ expectations.
Federal policy makers will hold their next meeting from July 25-26.
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