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.