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First Cut: JOLTS data shows some easing in job openings and new hires, but still close on series’ record

The data on job openings and labor turnover (JOLTS) for May was anticipated to be a little softer than the prior month due to the pause in hiring visible in the Employment Situation. This proved to be the case, but underlying data is overall strong and steady.

Job openings dipped 49,000 to 7.323 million in May, still strong by historical standards if off the peaks seen in 2018. The job openings rate declined to 4.6%, its lowest since 4.5% in February when the aftereffects of the federal government shuttering in the prior month lingered. There might be cooling in the number of jobs available to fill, but not enough to suggest that the labor market is anything but vigorous.

New hires were down 266,000 to 5.725 million in May, a level that is consistent with the less robust pace of hiring of 2019 to-date compared to most of 2018, but not enough to suggest businesses are cutting back significantly. The hires rate dipped two-tenths to 3.8% and remained in line with the current trend level.

The number of job separations fell 192,000 to 5.495 million in May, indicating that the recent upswing in layoffs was fading. The separations rate declined two-tenth to 3.6%, on the low end of the range of readings in the past 18 months.

Net turnover — new hires minus separations — was up 230,000 in May. Low levels of layoffs and other sources of separation from jobs continues to be outdone by the level of additions to payrolls.

The level of workers voluntarily leaving jobs declined 91,000 in May to 3.425 million, but the quit rates remained at 2.3% for a 12th straight month and matched the series high. As a measure of workers’ perception of the viability of the labor market, quits continues to reflect workers moving more freely between jobs.

The Beveridge Curve shows that slack in the labor force is limited and has been for some time.

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