Investors around the world will be eagerly watching the jobs data to assess the impact of previous US Fed rate hikes on the labor market. The Job Openings and Labor Turnover (JOLT) Survey estimates for May 2023 were scheduled to be released on Thursday, July 6, 2023, at 10:00 a.m. (ET).
The latest numbers have been announced. According to trading economics: US-based employers announced 40.709K job cuts in June 2023, the lowest level since October 2022, compared to 80.809K in May. Still, the reading is above 32.517K layoffs announced a year earlier. The tech sector laid off nearly 5,000 employees. “The drop in cuts is not unusual for the summer months. In fact, June is historically the slowest month on average for announcements. It is also possible that the deep job losses predicted due to inflation and interest rates will not come to pass, particularly as the Fed holds rates,” said Andrew Challenger, senior vice president at Challenger, Gray & Christmas Inc.
So far this year, employers have announced 458,209 cuts, the highest first-half total since 2020. Technology is leading with 141,516 cuts, the second-highest total for the sector ever, followed by retail companies (48,212) and financial firms (39,768). The top reason for job cuts is Market/Economic Conditions, followed by Cost-Cutting and store, unit, or department Closings.
Private businesses in the US unexpectedly created 497K jobs in June 2023, the most since February 2022, and well above forecasts of 228K. The services sector added 373K jobs, led by leisure and hospitality (232K), trade/transportation/utilities (90K); and education/health (74K); while job losses were seen in information (-30K); financial activities (-16K); and professional/business (-5K). Meanwhile, the goods-producing industry added 124K jobs due to construction (97K) and mining (69K) while manufacturing lost 42K jobs. Small establishments created 299K jobs, and medium-sized 183K jobs while large firms shed 8K jobs.
On the wage front, pay increases slowed for both job changers (11.2%, the slowest since October 2021) and job stayers (6.4% vs 6.6%). “Consumer-facing service industries had a strong June. But wage growth continues to ebb in these same industries, and hiring likely is cresting after a late-cycle surge”, said Nela Richardson, chief economist, ADP.
The April Job Openings and Labor Turnover data was issued on May 31. On the final business day of April, the U.S. Bureau of Labor Statistics announced that there were 10.1 million job openings. The number of hires, at 6.1 million, barely changed throughout the course of the month. The April data ended three straight monthly decreases in job openings.
Fewer job openings mean the US Fed’s rate hikes are making an impact and slowing down the economy. More job openings mean the economy is still going strong and not getting bogged down by higher rates.
The total number of separations fell to 5.7 million. The number of layoffs and discharges (1.6 million) declined while the number of resignations (3.8 million) decreased during April. The information provides estimates for the whole nonfarm sector, by industry, and by establishment size class in terms of the number and rate of job vacancies, hiring, and separations.
The JOLTS program offers data on turnover and labor demand. For job openings, hiring, quits, layoffs and discharges, other separations, and total separations, estimates are published. All non-farm commercial businesses as well as civilian federal, state, and local governments in all 50 states as well as the District of Columbia are covered by the JOLTS program. The 2022 North American Industry Classification System is used to categorize industries starting with data for January 2023.