U.S. May JOLTS job openings significantly better than expected, with an increase in voluntary resignations

The U.S. Bureau of Labor Statistics released a report on Tuesday showing that despite uncertainties in the U.S. economy, the labor market remains stable. In May, JOLTS job openings unexpectedly rose, reaching the highest level since November of last year, better than expected and previous values.

In May, the U.S. JOLTS job openings stood at 7.769 million, higher than the expected 7.3 million and the previous value of 7.391 million. This JOLTS data exceeded media expectations based on a survey of all economists. Looking back at last month's data, JOLTS job openings also saw an unexpected increase.

Since hitting a record of 12.18 million in March 2022, JOLTS job openings have generally shown a downward trend due to a slowdown in demand caused by significant interest rate hikes by the Federal Reserve. In the previous months, JOLTS data rebounded somewhat alongside the Fed's interest rate cuts. The JOLTS data for April and May rebounded again. Overall, JOLTS job openings data can be quite volatile, with monthly changes of up to 500,000.

Economists tend to view the JOLTS report from an overall trend perspective, with job openings remaining relatively stable between 7 million and 8 million over the past year.

By industry, the unexpected rise in job openings in May was primarily driven by the leisure and hospitality sector. Job openings in the hospitality industry accounted for three-quarters of the job openings in May. The financial, transportation and warehousing, and healthcare sectors also saw moderate increases in job openings.

Media analysis pointed out that the number of JOLTS job openings in May was roughly in line with last year's average level. It is worth noting that the growth was mainly concentrated in one industry, while job openings in other industries were uneven. This indicates that employers are becoming increasingly cautious about retaining existing employees while expanding their workforce.

The ratio of job openings to unemployed persons, closely watched by Federal Reserve officials, rose to 1.1, which is generally consistent with pre-pandemic levels. This is the first increase in this metric in several months. In 2022, this ratio once reached 2.0. This is a key indicator for measuring the balance of labor supply and demand.

The JOLTS report also showed:

The number of layoffs decreased. In May, the number of layoffs fell to 188,000, and the layoff rate dropped to 1%.

At the same time, the number of hires also declined, with the largest decreases in healthcare and manufacturing. The number of hires slightly decreased from a year-high of 5.615 million to 5.503 million. Despite the decline, the extent was not significant enough to trigger panic related to the labor market.

The number of voluntary separations and the voluntary separation rate saw a slight increase. In May, the number of voluntary separations rose from 3.215 million to 3.293 million. A higher number of voluntary separations indicates a tighter labor market, where workers feel confident leaving their current jobs for better opportunities, and vice versa

Federal Reserve policymakers and economists will closely monitor the upcoming June non-farm payroll report to look for signs of a slowdown in the labor market. According to economists' estimates, the June non-farm payroll report is expected to show a slowdown in job growth and an increase in the unemployment rate.

The JOLTS report is one of the labor indicators most valued by former U.S. Treasury Secretary and former Federal Reserve Chair Janet Yellen during her tenure. This indicator is also highly regarded by the Federal Reserve as labor market data. However, it is worth noting that some economists question the reliability of JOLTS statistics due to the current low response rate of the survey, which is about half of what it was a few years ago.

A similar index released by the job site Indeed shows a decline in job vacancies in May. Indeed's data is published daily.

Economists expect that as President Trump's tariff policies take effect, the U.S. labor market will show more pronounced signs of weakness in the coming months. However, these signs of weakness have not yet been reflected in the data, supporting the Federal Reserve's stance to keep interest rates unchanged