Job Openings Decline in May but Remain at Elevated Levels

Pedestrians walk past a Now Hiring sign in Arlington, Virginia, on March 16, 2022. (Stefani Reynolds/AFP via Getty Images)

U.S. employers posted fewer jobs in May, signaling a weakening economy despite the fact that job openings continue to remain at high levels.

“On the last business day of May, the number and rate of job openings decreased to 11.3 million (-427,000) and 6.9 percent, respectively. 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),” said a July 6 press release by the Bureau of Labor Statistics (BLS).

The number of hires remained “little changed” at 6.5 million and the hires rate was “unchanged” at 4.3 percent. The number of total separations—including quits, layoffs, and discharges as well as other separations—was “little changed” at 6 million. The separation rate remained “unchanged” at 3.9 percent.

For the 12 months ending in May, hires came in at a total of 78.4 million while separations totaled 72 million, resulting in a gain in net employment of 6.4 million.

The number of unemployed people in May was 6 million, according to a June 3 press release (pdf) by the BLS. Considering the number of job openings was 11.3 million for the month, this roughly comes to two job openings per unemployed individual.

Experts are closely watching for signs of cooling in the labor market as it could bring down inflation. As there are many job openings, companies have been raising pay in a bid to retain workers, which, in turn, has contributed to pushing up inflation during the past months to four-decade highs.

In a recent Federal Open Market Committee (FOMC) policy meeting, the Fed indicated that it might adopt a “more restrictive” policy if inflation remains at high levels.

Recession and Jobs

Recession remains a major worry in the job market. A survey by Insight Global found that 78 percent of American workers are worried about their job security when the next recession hits, with 23 percent admitting to being “extremely worried” about losing their jobs. Managers were found to be more worried about losing their jobs than non-managers.

Top companies have been cutting back on jobs in recent months. Tesla laid off around 200 workers, while Swiss drugmaker Novartis may cut around 8,000 jobs. Due to high inflation, many companies are finding it difficult to pass on the extra costs from raw materials and labor to customers.

“For the majority of companies, they have to swallow a lot of these price rises themselves, and that means cutting back elsewhere,” said Stuart Cole, head macroeconomist at Equiti Capital, according to Reuters.

Around 60 percent of CEOs who were polled about the potential of an upcoming recession said that they are expecting it within the next year to 18 months.