Jobs fell in May as the number of workers leaving their jobs increased, the Labor Department reported Thursday.
There were 9.8 million jobs in May, down from 10.3 million in April, according to the Survey of Jobs and Labor Turnover, known as JOLTS. The report shows that the labor market maintains ample opportunities for workers, but it is losing momentum.
The quit rate, which is often used to gauge worker confidence in the labor market, rose in May, particularly in the health care, social assistance and construction industries. An increase in quitting often signals workers’ confidence that they will be able to find another job, often better paying. But fewer workers are quitting their jobs than they did last year at the height of what has been called the “great resignation.”
Layoffs were relatively steady after declining in previous months, a sign that employers are reluctant to let go of workers.
Why It Matters: The Fed’s next move on interest rates is unclear.
Policymakers at the Federal Reserve have been concerned about the strength of the labor market as they continue to deal with stubbornly high inflation.
The Fed chose to leave interest rates unchanged at its June meeting after 10 consecutive increases. The JOLTS report is one of several factors that will inform the Fed’s next rate decision.
Some economists worry that the Fed will raise interest rates too much and trigger a recession.
Background: A cooling labor market maintains underlying strength.
The labor market has remained resilient amid the Fed’s efforts to slow the economy but has shown signs of cooling in recent months. Jobs declined for three consecutive months through April.
initial unemployment claimsalso released by the Labor Department on Thursday, nudged higher in the week ending July 1 from the week before, although the four-week trend shows initial claims declining.
What’s next: The June jobs report comes Friday.
The June employment report – another indicator closely watched by the Fed – will be released by the Labor Department on Friday. Economists polled by Bloomberg expected the report to show a gain of 225,000, down from the initial reading of 339,000 for May.
The unemployment rate jumped to 3.7 percent in May, from 3.4 percent a month earlier. Although still historically low, the rate was the highest since October and exceeded analysts’ expectations.
Fed policymakers will hold their next meeting on July 25-26.