U.S. job vacancies fall to 9.8 million, but remain high, showing stability in the labor market

WASHINGTON (AP) – U.S. job vacancies fell in May, but remained high enough to suggest the U.S. labor market remains resilient amid sharply higher interest rates.

Employers posted 9.8 million job vacancies, up from 10.3 million in April, the Labor Department said Thursday. But layoffs fell slightly, and more Americans quit, a sign that they were confident they could find better pay or better working conditions elsewhere.

Vacancies fell in the healthcare, insurance and financial sectors. But there were more jobs in education and government.

The Labor Department’s Job Openings and Job Transitions Survey (JOLTS) “continues to show a gradually slowing but still strong labor market, cooler than a year ago but still hot,” said Nick Bunker, director of research at Indeed Hiring Laboratory. . He added that “demand for new workers remains high and employers are still retaining existing workers.”

LEARN MORE: The Federal Reserve’s inflation index fell to a two-year low

Monthly job postings remain high by historical standards — they never hit 8 million until 2021 — despite the Federal Reserve’s aggressive campaign to cool the U.S. labor market and combat inflation, which hit a four-decade high last year. The Fed raised its short-term interest rate 10 times from March 2022.

Higher borrowing costs have had an impact: economic growth has slowed and monthly job creation has declined from a peak of 12 million in March 2022, the highest on record. Inflation also eased: Consumer prices rose 4% in May from a year earlier, up from 9.1% in June 2022, but more than double the Fed’s 2% target.

Economists have long predicted that the US will enter a recession this year. But continued strength in the labor market has raised doubts about whether an eventual slowdown is inevitable.

Employers added 314,000 jobs per month this year, and May’s unemployment rate of 3.7% was not far from a half-century low.

The Labor Department will release its jobs report for June on Friday. Forecasters polled by data firm FactSet expect payrolls to have increased by another 205,000 last month and the unemployment rate to fall to 3.6%.