Job Openings Show Signs of a Slowdown

Job Openings Show Signs of a Slowdown



Authored by RSM US LLP, July 06, 2022

 

Job openings declined for the second straight month in May as the Federal Reserve’s rate hikes slowed down overall demand. Still, the level of job vacancies—a proxy for labor demand—remained near a record high, which, in our view, was a sign of an overheated labor market

If anything, the job openings data, released by the Labor Department on Wednesday, will give the Federal Reverse another reason to stay hawkish regarding interest rate hikes.

Job openings

Openings declined to 11.3 million from an upwardly revised 11.7 million in April. That pushed the vacancy rate to 6.9%, a sizable drop from 7.2% in April and the record high of 7.3% in March.

The number of openings per unemployed worker—which shows how tight the labor market is—also continued to decline for the second month in a row to 1.89 from the record high of 1.99 in March.

Both figures reaffirmed that peak labor demand was reached in March, yet the decreases may not be fast enough as far as inflation was concerned.

Job vacancy rates declined for all industries except for leisure and hospitality, as well as trade, transportation and utilities, as demand stayed strong for the two service-related industries during summertime.

Monthly labor turnover

Strong labor demand has been the No. 1 factor that keeps layoffs at a historic low while keeping the quit rate near a record high—at 2.8% in May. But in our estimate, such a robust level of labor demand in recent months has not reflected the real level of demand growth that has slowed down significantly.

The hiring rate, on the other hand, has been much more stable since last year, in part because of labor shortages that hampered hiring. May’s hiring rate was 4.3%.

But moving forward, an economic slowdown, hiring freezes among employers and increases in layoffs will be the main driver that will push the hiring rate lower.

DO YOU HAVE QUESTIONS OR WANT TO TALK?

Fill out the form below and we’ll contact you to discuss your specific situation.

  • Message:
  • Topic Name:
  • Should be Empty:

This article was written by Tuan Nguyen and originally appeared on 2022-07-06.
2022 RSM US LLP. All rights reserved.
https://realeconomy.rsmus.com/job-openings-show-signs-of-a-slowdown/

RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/aboutus for more information regarding RSM US LLP and RSM International. The RSM(tm) brandmark is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.


RSM

Haynie & Company is a proud member of RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.

Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise, and technical resources.