Job openings show sharp decline, but still vastly outnumber available workers

Job openings fell by nearly half a million in April, narrowing the historically large gap between vacant positions and available workers, the Bureau of Labor Statistics reported Wednesday.

The openings total declined by 455,000 from the upwardly revised March number to 11.4 million in April, about in line with the FactSet estimate, according to the bureau’s Job Openings and Labor Turnover Survey.

That left a gap of 5.46 million between openings and the available workers, still high by historical standards and reflective of a very tight labor market, but below the nearly 5.6 million difference from March. As a share of the labor force, the job openings rate fell 0.3 percentage points to 7%.

Policymakers at the Federal Reserve watch the jobs numbers closely for signs of labor slack. The shortage of workers has pushed wages sharply higher and fed inflation pressures running at their highest levels since the early 1980s.

“April’s JOLTS report shows the jobs market remains squeaky tight, with near-record job openings and layoffs hitting a record low,” said Robert Frick, corporate economist at Navy Federal Credit Union. “This almost guarantees another healthy employment report on Friday and means employers’ focus is on expansion despite high inflation and pending higher interest rates.”

However, the JOLTS report combined with a closely watched manufacturing reading to show a potential shift in the employment picture.

The ISM Manufacturing Index showed that firms on balance expect to cut back on the pace of hiring. Specifically, the employment component showed a reading of 49.6, the first sub-50 reading since November 2020, according to Bespoke Investment Group.

Anything below 50 represents a reduction as the survey gauges business expansion against contraction. The headline ISM number was 56.1 for May, which was higher than April’s 55.4.

Despite the potential slowdown in manufacturing hires, worker mobility remains strong.

The JOLTS report showed that 4.4 million workers left their positions in April, little changed from the March reading and reflective of the ongoing “Great Resignation” that has seen unprecedented market movement amid the high demand for labor.

Hiring was little changed on the month, though there was a drop-off in the leisure and hospitality sector. The industry saw hiring decline by 77,000, or a half percentage point fall to 7.2%. A year ago, the hire rate was 9%.

The numbers came two days ahead of the pivotal nonfarm payrolls report for May. The Dow Jones estimate is for 328,000 more jobs added, following a gain of 428,000 in April, and the unemployment rate to drop to 3.5%.