A Labor Department report on Thursday indicated that there were about half a million fewer job openings in May than in April. This may imply that the ultra-tight labor market may be loosening a bit. In the closely watched Job Openings and Labor Turnover Survey, listings fell to 9.82 million, down 496,000 from April and below the consensus estimate of 9.9 million provided by FactSet. There were more job openings than available labor pool for the month, a level that had been closer to 2 to 1 just a few months prior. The decline would have been even more without an increase of 61,000 government-related positions. Openings tumbled in health care, social assistance (-285,000), finance, and insurance (-139,000). The report comes amid conflicting signs of where the labor market is heading. Earlier Thursday, payroll services firm ADP reported 497,000 new private sector jobs in June, more than double the 220,000 Dow Jones estimate. The report raised fears that the Federal Reserve would need to keep up interest rates to contain inflation.
In a Thursday morning speech, Dallas Fed President Lorie Logan claimed that inflation was not falling rapidly enough. She also claimed that a more restrictive monetary policy would be necessary to address labor market imbalances. “Job openings remain far above the 2019 level. Layoffs remain low. There is no indication of an abrupt deterioration in labor market conditions,” Logan said in remarks delivered at Columbia University in New York. “The continuing outlook for above-target inflation and a stronger-than-expected labor market calls for more restrictive monetary policy,” she added. The JOLTS report revealed an increase in quits, a sign of a tight labor market in which workers feel confident they can leave their current jobs for more challenging positions. Quits increased by 250,000, taking the rate up to 2.6%, a 0.2 percentage point increase.