With US job openings hitting an all time high in late 2018, with more than 1.3 million more job openings than unemployed workers, and with April and May payrolls both coming in unexpectedly weak (only to rebound in June), it was to be expected that the May JOLTS report would be subpar, and so it was, with the BLS reporting that there were “only” 7.323 million job openings, down from 7.372 million in April (revised from 7.449 million), and below the 7.473 million expected.
This was the weakest print since February’s outlier number of 7.142 million, and one would have to go all the way back to May 2018 to find a consistently weaker number.
More notably, this was the weakest start to the year in terms of job openings since 2009.
That said, even with the disappointing openings print, there was still more than 1.3 million more job opening than unemployed workers.
More concerning is that the number of hires saw one of its biggest monthly drops in years, sliding by 266K to 5.725MM, if still in line with where the payrolls implied print should be. In other words, in an economy in which there was a perfect match between worker skills and employer needs, there would be zero unemployed people at this moment (of course, that is not the case.)
At the same time, another adverse trend emerged in the so-called “take this job and shove it indicator”, i.e., the total level of quits, which shows worker confidence that they can leave their current job and find a better paying job elsewhere, it also declined to a 2019 low of 3.425MM, dropping by 91K on the month.
Putting all this in context:
Job openings have increased since a low in July 2009. They returned to the prerecession level in April 2014 and
- surpassed the prerecession peak in August 2014. There were 7.3 million open jobs on the last business day of May
- Hires have increased since a low in June 2009 and have surpassed prerecession levels. In May 2019, there were 5.7
- million hires.
- Quits have increased since a low in August 2009 and have surpassed prerecession levels. In May 2019, there were
- 3.4 million quits.
- For most of the JOLTS history, the number of hires (measured throughout the month) has exceeded the number of
- job openings (measured only on the last business day of the month). Since January 2015, however, this relationship
- has reversed with job openings outnumbering hires in all months.
- At the end of the most recent recession in June 2009, there were 1.1 million more hires throughout the month than
- there were job openings on the last business day of the month. In May 2019, there were 1.6 million fewer hires than job openings.