To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.
The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.
Good news, bad news, depending on your profession
That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.
Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.
Realtor.com’s Chief Economist weighs in
Jonathan Smoke, Chief Economist at realtor.com addresses how this data pertains to housing. “Employment indicators are always relevant for housing as job growth and strength are correlated with growth in home prices and home sales,” he notes.
Smoke added, “With interest rates now riding on how employment and inflation trend this year, today’s strong data provides further support for formal action by the Fed before the year is over. As the financial markets adjust to anticipate such a move, we could see near term increases in mortgage rates, just like we saw last week, as the average 30-year fixed rate ended the week above 4.1 percent with a strong May employment report.”