America’s red-hot job market just won’t quit

(CNN) — The number of available jobs in the US unexpectedly grew in May, signaling continued resilience in the nation’s labor market.

Job openings jumped higher to 8.14 million in May, from a downwardly revised 7.91 million in April, according to the Bureau of Labor Statistics’ latest Job Openings and Labor Turnover Survey (JOLTS) report released Tuesday.

Economists had expected openings would fall to 7.91 million, according to FactSet consensus estimates.

Despite the uptick in job postings, which can be quite volatile, May’s JOLTS report marked a significant milestone for the US labor market: The ratio of job openings to those who are unemployed fell to 1.22 available jobs per job seeker, matching the figure seen in February 2020, a month prior to the pandemic lockdowns that shocked the global economy.

That ratio has been steadily moving lower since hitting a record 2.0 in March 2022, JOLTS data shows.

“The report was another sign that the labor market is holding firm,” Robert Frick, corporate economist with Navy Federal Credit Union, said in a statement issued Tuesday. “So far there are no indications that job growth will flag this year, so consumer spending power will continue to increase and the expansion looks solid.”

Industries seeing the biggest increase in openings included manufacturing (specifically durable goods) and government (federal, state and local). Those seeing the greatest pullback from April included real estate and leisure and hospitality, BLS data shows.

Pendulum swings away from workers

Other seasonally adjusted measures of labor turnover showed continued stability in the US jobs market, which has gradually cooled in recent months while remaining historically strong.

The estimated number of hires moved up to 5.76 million from 5.62 million in April; layoffs and separations bounced higher to 1.65 million in May, up from 1.54 million; while the number of voluntary quits inched upward to 3.46 million from 3.45 million.

While both hires and job openings rates (as a percentage of total employment) ticked higher for May, the quits rate and layoffs rate were unchanged.

Economists have been closely watching the quits rate — which has held steady at 2.2% for seven months running — as it serves as a signal for workers’ willingness to test the labor market’s waters. When people switch jobs, that typically can correlate to bigger pay bumps, which in turn potentially could make it more difficult to rein in inflation.

Job-switchers’ pay raises have pared down significantly from the “Great Resignation” period, according to a newly released analysis from Bank of America.

Economists there analyzed internal customer data and found that median wage hikes are about half the size they were during the height of pandemic-era job changes.

In fact, the median pay raises are just below 2019 levels, David Tinsley, senior economist at the Bank of America Institute, told CNN.

“People are still moving between jobs at a slightly faster rate than they were pre-pandemic … but the pay raises they’re getting when they make those moves is a degree softer,” he said. “That sort of suggests that the pendulum has swung slightly more in favor of firms and away from workers.”

Labor market steady or a turning point?

The labor market appears to be at a crossroads, Nick Bunker, Indeed Hiring Lab’s head of economic research, wrote in commentary posted Tuesday.

“The words ‘little changed’ were repeated no fewer than a half dozen times in the May JOLTS release, and virtually every key indicator tracked showed limited notable movement, either up or down,” Bunker wrote. “This short-run stability is a good thing. But the question remains if this period of calm can continue or if more unsteady times are on the horizon.”

“This current level of job openings is consistent with a healthy, sustainable and balanced market, but any continued declines below these current levels will quickly become more worrisome,” he wrote.

It may take an interest rate cut to ensure employers’ demand for workers doesn’t tumble too far, he added.

Federal Reserve officials still broadly believe the job market remains on solid footing, which is allowing central banker to comfortably keep interest rates perched at a 23-year high as they await more evidence that inflation is under control.

But some Fed officials have noted that the job market has lost momentum recently and that it’s highly unclear whether it will continue to hold steady or weaken further.

“If employment starts falling apart or if the economy begins to weaken, which you’ve seen some warning signs, you’ve got to balance that off with the progress you’re making on the price front,” Chicago Fed President Austan Goolsbee told Bloomberg TV on Tuesday during a conference hosted by the European Central Bank in Sintra, Portugal.

“The unemployment rate is still quite low, but it has been rising,” he said.

More jobs data coming Friday

In May, the US unemployment rate increased to 4%, a rate that hadn’t been seen since January 2022. Still, job growth remained strong in May, coming in at an estimated net gain of 272,000.

Economists largely expect that job gains cooled off in June. As of Tuesday, FactSet consensus estimates are for a 189,000 net gain.

First-time claims for unemployment benefits (considered a proxy for layoffs) have drifted higher in recent weeks, landing in line with pre-pandemic averages.

“They’re still low, historically speaking, but they are up between the May and June payroll survey reference months, so we do think we could see some slowdown in job growth over the month,” Marisa DiNatale, head labor economist for Moody’s Analytics, told CNN in an interview.

The Bureau of Labor Statistics will release the latest jobs report at 8:30 a.m. ET on Friday.

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CNN’s Bryan Mena contributed to this report.