Job Openings Continue to Fall, but “The Quits Keep on Coming”
There were mixed signals with the release of the June JOLTS report from the U.S. Bureau of Labor Statistics (BLS) as job openings fell by over 600,000 to 10.7 million, but for the 13th consecutive month more than 4 million workers voluntarily left their jobs.
“The drop in job openings marks the third month in a row of declines, indicating that labor shortages are beginning to ease, although levels remain nearly twice as high as the pre-pandemic norm,” wrote Roy Maurer for the Society for Human Resource Management (SHRM).
The Job Openings and Labor Turnover Summary (JOLTS) for June 2022 released on August 2, 2022, showed that, while down slightly, “the number of quits was little changed at 4.2 million.”
“Quits fell by 37,000 in June, but the sustained wave of quitting signals that workers continue to feel comfortable enough amid record-high openings to switch jobs in pursuit of higher pay or better working conditions,” concluded Maurer.
Labor Gap Pushes Costs and Wages Higher
Job openings outnumbered unemployed workers by about 4.8 million in June – leaving about 1.8 open jobs per available worker.
“The recovery in labor force participation still has a long way to go, leaving the labor market with a massive gap between supply and demand that's pushing labor costs and wages higher,” wrote Maurer.
Overall, the job openings rate was 6.6 percent in June, down from 6.9 percent in May, 7.2 percent in April, and 7.3 percent in March.
The job openings rate was 7.0 percent for the private sector in June (down from 7.4 percent in May) and 4.0 percent for the government (down from 4.4 percent in May).
“The largest decreases in job openings were in retail trade (-343,000), wholesale trade (-82,000), and in state and local government education (-62,000),” said the BLS.
The job openings rate in June 2022 by sector:
- Mining and logging: 5.2 percent
- Construction: 4.2 percent
- Durable goods manufacturing: 5.8 percent
- Nondurable goods manufacturing: 5.5 percent
- Wholesale trade: 4.7 percent
- Retail trade: 5.1 percent
- Transportation, warehousing, and utilities: 6.8 percent
- Information: 7.9 percent
- Finance and insurance: 5.7 percent
- Real estate and rental and leasing: 5.3 percent
- Professional and business services: 8.3 percent
- Education services: 8.4 percent
- Health care and social assistance: 9.1 percent
- Arts, entertainment, and recreation: 6.0 percent
- Accommodation and food services: 8.9 percent
- Federal government: 2.9 percent
- State and local education: 2.8 percent
- State and local government (excluding education): 5.7 percent
Quits Rate Unchanged at 2.8 percent over Past Year
The BLS reported that the June quits rate was unchanged at 2.8 percent.
“Quits decreased in construction (-51,000). Quits increased in state and local government education (+14,000),” said the BLS.
The quits rate at 2.8 percent has not budged from the previous 12 months where it was 2.8 percent in June 2021.
The quits rate was 3.1 percent for the private sector compared to 1.1 percent for government employment.
The quits rate in June 2022 by sector:
- Mining and logging: 2.7 percent
- Construction: 2.3 percent
- Durable goods manufacturing: 2.1 percent
- Nondurable goods manufacturing: 3.2 percent
- Wholesale trade: 2.0 percent
- Retail trade: 4.0 percent
- Transportation, warehousing, and utilities: 2.9 percent
- Information: 1.9 percent
- Finance and insurance: 1.4 percent
- Real estate and rental and leasing: 1.4 percent
- Professional and business services: 3.3 percent
- Education services: 1.5 percent
- Health care and social assistance: 2.7 percent
- Arts, entertainment, and recreation: 3.6 percent
- Accommodation and food services: 5.7 percent
- Federal government: 0.8 percent
- State and local education: 1.1 percent
- State and local government (excluding education): 1.2 percent
Little Change in June for Hires, Layoffs and Separations Rates
There was little movement in June 2022 for the rate of hires, layoffs, and separations, according to the BLS:
- The number and rate of hires were little changed at 6.4 million and 4.2 percent, respectively. Hires were little changed in all industries.
- The number and rate of total separation were little changed at 5.9 million and 3.9 percent, respectively. Total separations were little changed in all industries.
- The number of layoffs and discharges was little changed at 1.3 million. The rate was unchanged at 0.9 percent. Layoffs and discharges decreased in wholesale trade (-26,000), finance and insurance (-25,000), and federal government (-4,000).
- The number of other separations was little changed in June at 367,000. Other separations decreased in real estate and rental and leasing (-9,000). Other separations increased in transportation, warehousing, and utilities (+9,000); durable goods manufacturing (+6,000); educational services (+3,000); and in federal government (+3,000).
With little change in the numbers of separations or quits, that shows employers are taking down job postings as opposed to turning to layoffs, Layla O’Kane, senior economist at Lightcast, told CNN.
"Employers are saying 'we're not going to lay people off, but we're going to give up on finding some of the talent we want,'" O'Kane said in the statement.
Robert Frick, corporate economist at Navy Federal Credit Union, interpreted the reduction in June openings for Fortune as: “Fewer openings likely mean the froth is being blown off inflated listings for openings as the economy slows down, not that demand for workers is dropping.”
Reuters says that the job openings report is a metric being closely watched by Fed officials, which have been fighting inflation with steep interest rate hikes this year.
"The labor market may be cooling off, but the temperature decline is far from a plunge," Nick Bunker, director of economic research at Indeed Hiring Lab in Washington, told Reuters. "The outlook for economic growth may not be as rosy as it was a few months ago, but there's no sign of imminent danger in the labor market."