After hitting an all-time high last month, job openings dropped sharply MoM in May, to 5.5mm. Total separations (quits, firings, retirements, and all other forms of job departure) also slowed to 3.4%, from cycle highs hit earlier this year. Both indicate a slightly less tight labor market than would otherwise be the case, but it’s worth noting that the strong June payrolls figures suggest some seasonal issues between May and June in terms of adjustments to various figures.

Along with the lower openings numbers, the openings rate dropped noticeably.  Private openings were the source of the decline, with the government openings rate unchanged MoM at the second-highest level recorded since the data series starts in 2000.

Quits for May showed further softening, though ongoing anecdotal evidence suggests businesses are having issues with talent retention (Starbucks raised prices and wages this week). Overall, the quits rate continues to trend gently higher but is at the lower end of its recent range as-of May.

While openings suggest a softening of labor demand, the JOLTS survey shows no evidence of cuts to existing labor forces. Layoffs and Discharges are both for all intents and purposes at the lows, and comfortably below recent minor upticks.

The low end of the labor market remains the place where the action is. Food Services has a quit rate at its highest level of the expansion, though retail store closures have held down the quit rate for that segment. Transportation is also seeing a rollover in its quit rate while Construction is volatile. On a regional basis, no particular area of the country saw an outlying print this month to skew layoff rates.

This morning’s report on optimism for small businesses improved for the third straight month in June, as the index of small business optimism from the NFIB increased from 93.8 up to 94.5 and exceeded consensus expectations of 93.9.  June’s increase also represents the third straight monthly increase in the index, and while that may not sound like much, the last one was in the fourth quarter of 2014.  That’s the good news.  The bad news is that this month’s reading is still 1.5 points below the average reading of 96.0 dating back to 2000 and is still below where it closed out 2015.  Additionally, as noted in the report from the NFIB, “…more owners still expect conditions to be worse than expect improvement.”

The table to the right shows which issue business owners say is their number one problem.  As is the case practically every month, Taxes and Govt Red Tape top the list at a combined 42%.  Behind those two problems, business owners are increasingly citing Quality of Labor as a problem, while Poor Sales declined.  Given the dollar’s recent strength and the plunge in interest rates post-Brexit, it shouldn’t be too much of a surprise to see that Inflation and Interest Rates are the two issues that have been cited the least by respondents at 2% each.

Shares of Seagate Technology (STX) are currently up over 19% versus yesterday’s close after the company raised sales guidance last night.  STX has historically been volatile, but even for this stock a 19% one-day gain raises eyebrows.  In fact, to find the last time the stock rallied more in a single day, you have to go back to 2/1/12 when the company reported strong Q4 results and raised guidance.  Besides that day, the only other time in the last five years where STX saw a larger gain than today was on 10/21/11 when it also rallied in reaction to strong earnings.  Perhaps even more notable than today’s rally in STX is the fact that the stock is still down 17% on the year.  That’s because at one point in early May, it was down 47% YTD, so even after a rally of 57% off the lows, shares of STX still have some climbing to do before getting back in the black.

Financial markets sure have recovered following the two-day Brexit sell-off.  After nice gains through Thursday, equities and risk assets went into overdrive following Friday’s Non-Farm Payrolls report.  To put this move into perspective, including today’s trading, over the last ten trading days the S&P 500 has rallied over 7.5%.  Throughout the current bull market, there have only been six other periods where equities have seen this sharp of a rally in such a short period of time with the last one occurring over four years ago in December 2011.  This may be one of the most-hated bull markets on record, but it just broke out to new highs in style.