“Everybody thinks we’re in a recession, except the labor market. We’re seeing signs of cooling off in the stock market and the housing market. But so far it has been disconnected from the job market.”
That’s Bledi Taska, chief economist of labor analysis group Lightcast, commenting on Wednesday’s Job Openings and Labor Turnover Survey from the Bureau of Labor Statistics.
The May numbers showed that job openings edged down to 11.3 million from 11.6 million in April. Quits and layoffs remained largely unchanged. Quits ticked down to 2.8% and layoffs remained at 0.9%, slightly above the lowest rate in 20 years.
The May JOLTS data raises the stakes for the jobs report coming out this Friday, which will cover June and provide insights into wage inflation, Taska said.
Worries of a potential recession for the U.S. economy have hovered over the market as inflation has hit a 40-year high and the Federal Reserve has raised interest rates in an attempt to tame soaring prices.
Professional and business services saw the biggest decrease in job openings in the May JOLTS report, dropping by 325,000. The information sector saw an increase in layoffs from 0.9% to 1% in May. Some startups and crypto employers have been withdrawing job offers in the past month.
Nonetheless, the May report shows that workers still have the upper hand for now, Lightcast Senior Economist Layla O’Kane said. There are still incentives for workers to switch jobs for more money, she said, because wage increases are not keeping up with inflation.
“I do think that workers are going to continue to hold the cards, especially as real wages are falling due to inflation,” O’Kane said. “That could continue to change the calculus of job hunting because workers might be feeling some of that inflation pain as well.”
