U.S. employers posted fewer job openings in May. But hiring picked up and more people are quitting their jobs — both positive signs for the economy.
Job openings fell 5 percent in May to 5.7 million, the Labor Department said Tuesday. The setback occurred after advertised job postings nearly reached 6 million in April, a figure that has been revised downward from the initial report. Meanwhile, hiring climbed 8.5 per cent to just under 5.5 million.
The data is a sign the economy at 4.4 percent unemployment is nearing "full employment," when nearly all those who want a job have one and the unemployment rate mostly reflects the normal churn of people who are temporarily out of work. Typically, when unemployment falls that low, companies are forced to offer more pay, but that hasn't yet happened.
Jed Kolko, an economist at the jobs site Indeed, said the report "shows what workers do in a tight labor market" in which there are more quits than layoffs and fewer unemployed workers for each job opening.
Workers have certainly become more confident in the past year that they can find jobs.
The number of people quitting their jobs has increased 7.1 percent to 3.2 million. People usually quit when they either find a new job, often at higher pay, or are confident they can soon be hired elsewhere.
But even then, Kolko said that the level of churn reflected by people getting hired or leaving their jobs has been lower than it was in the early 2000s, which is consistent with the relatively slow wage gains.
May job openings fell by a meaningful amount in construction and transportation, warehousing and utilities. Advertising openings increased for retailers and educational services.
Hiring was most robust in the professional and business services sector in May, as well as educational services.
When unemployment is this low, wages generally rise. But average hourly earnings have increased just 2.5 percent over the past 12 months, staying ahead of inflation but hardly a substantial pay hike. The last time the unemployment rate was this low, wages were rising by about 4 percent.
The government said Friday that employers added 222,000 jobs in June and revised the prior two months' hiring figures upward. Friday's figures represent a net total of jobs added minus jobs lost, while Tuesday's report includes overall hiring data.
Those figures are net gains after layoffs, quits and retirements are subtracted from overall hiring.
Tuesday's data come from the Job Openings and Labor Turnover survey, or JOLTS. They are more detailed and provide a fuller view of the job market than the monthly jobs.