US job openings unexpectedly rose in May to the highest level since November, largely fueled by leisure and hospitality, and layoffs declined, pointing to a stable labor market despite economic uncertainty.
Available positions increased by 374,000 to 7.77 million, according to Bureau of Labor Statistics data published Tuesday. That exceeded all estimates in a Bloomberg survey of economists.
Vacancies in the hospitality sector accounted for three quarters of May openings. The finance, transportation and warehousing industries as well health care also saw more moderate gains.
The May gain brought openings roughly in line with last year’s average. However, the increase was concentrated in one industry and openings in other sectors were more mixed. That suggests employers are growing cautious about expanding their staff while at the same time mostly holding onto their existing workers.
The number of layoffs fell to 188,000 in May, bringing the layoff rate down to 1%. At the same, hiring declined, led by drops in health care and manufacturing.
The number of vacancies per unemployed worker, a ratio Fed officials watch closely as a proxy of the balance between labor demand and supply, rose to 1.1. At its peak in 2022, the ratio was 2 to 1.
The so-called quits rate, which measures the percentage of people voluntarily leaving their jobs each month, edged up slightly.
Some economists have questioned the validity of the JOLTS data, in part due to the survey’s low response rate and heavy revisions. A similar index by job-posting site Indeed, which is reported on a daily basis, showed openings declined in May.
The government’s June employment report, due Thursday, is expected to a show a slowdown in nonfarm payroll growth and an uptick in the unemployment rate, based on economists’ estimates.
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