Demand for workers ticked up in May, hitting the third straight high, as the economy continues to reopen and workers hold more leverage.
Employers added 16,000 job openings, reaching 9.2 million in May, according to the Labor Department’s latest JOLTS report. This is 31% higher than its pre-pandemic level in February 2020 and above the previous records hit in April and March of this year. Hiring, though, ebbed in May with 5.9 million new hires versus 6 million in April.
"This is still a really large number of job openings. Demand seems to still be extraordinarily high," Nick Bunker, director of research at Indeed, told Yahoo Money. "Even though job openings didn't increase [significantly], the number of unemployed people did [decrease]. That suggests that there is sort of continued bargaining power for job seekers."
The number of unemployed workers per job opening also fell to 1 in May, a significant drop from its peak of 5 unemployed workers per job opening in April 2020. The ratio is slightly above its pre-pandemic level, but the rate has been falling at a rapid pace.
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At the same time, the number and rate of layoffs and discharges hit new series lows of 1.4 million and 0.9%, respectively.
The rate of workers voluntarily leaving their jobs — a sign of workers' confidence — slipped to 2.5% after reaching an all-time high of 2.7% in April. The level is still the second-highest on record, tied with the rate in March. It's also well above the pandemic low of 1.6% in April 2020.
"These are levels that are still higher than what we saw before the pandemic," Bunker said. "People are using a labor market where there's lots of demand to switch jobs."
Accommodation and food services had the largest quit rate in May of 5.7% — unchanged from April —followed by retail trade's 4% quit rate, which was down slightly from April. Quits levels in both industries are well above their pre-pandemic levels.
"They've seen [some] of the largest increases in their quits rate compared to the pandemic," Bunker said. "Workers in those industries are really seizing opportunities, moving to new places, finding new work."
Wages for new hires in low-wage service industry jobs — the ones hardest hit by the pandemic shutdowns — have been growing faster than expected, driven by surging demand and more reluctant supply, a recent paper by the Federal Reserve Bank of Atlanta found.
Job openings in accommodation and food services also increased slightly to 1.2 million, while 974,000 job openings were added in retail trade. Hires also increased in those two sectors, reaching 1.4 million in accommodation and food services and 823,000 in retail trade.
"Maybe as more and more hiring is happening there and that pool of workers [who are more] likely to return to work disappears, maybe we'll start to see more tightness, more difficulty in hiring for employers," Bunker said, "and more bargaining power for employees moving ahead if that trend keeps up."
Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova
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