Revised JOLTS Data Show Slowing Job Openings

Due to tightened monetary policy, the count of open jobs for the economy and construction is declining, per the Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS). This is consistent with a somewhat cooler economy, which is a positive sign for future inflation readings.

In April, the number of open jobs for the economy fell to 8.06 million. This is smaller than the 9.90 million estimate reported a year ago. NAHB analysis indicate that this number must fall back below 8 million for the Federal Reserve to feel more comfortable about labor market conditions and their potential impacts on inflation, which means we will be near that range in the coming months.

While the Fed intends for higher interest rates to have an impact on the demand-side of the economy, the ultimate solution for the labor shortage will not be found by slowing worker demand, but by recruiting, training and retaining skilled workers. This is where the risk of a monetary policy mistake had some risk of arising. Good news for the labor market does not automatically imply bad news for inflation.

Last month, the number of open construction sector jobs originally posted a surprising decline for March, falling from 456,000 in February to just 274,000. However, the March estimate was, as expected, revised significantly higher to 346,000. This month, the initial April estimate shows a further decline to 338,000 open jobs in construction. There are elements of the construction sector slowing as higher rates for longer holds, most notably multifamily development.

The open job count was 363,000 a year ago during a period of weaker single-family home construction. The construction job openings rate decreased to 3.9% in April, the lowest reading since March 2023. However, while this rate may be revised higher next month, the recent trend for construction is one of cooling for the construction labor market.

The construction sector layoff rate declined to 1.9% compared to 2.5% a year ago. The hiring rate decreased to 4.3% in April, compared to 4.6% from a year ago.