US labour market remains resilient despite moderation in hiring

The United States labor market is demonstrating resilience, with employers continuing to seek workers even as hiring activity moderates. Elevated job openings and stable labor turnover suggest underlying strength, reinforcing expectations that the employment market is cooling gradually rather than experiencing a sharp downturn.

The U.S. Department of Labor's latest Job Openings and Labor Turnover Survey (JOLTS) reported 7.59 million job openings in May, a slight change from April, with the national openings rate holding steady at 4.6 percent. While total hires decreased modestly to 5.17 million, the hires rate remained at 3.3 percent. This indicates that employers are selective but still actively adding to their workforce.

Labor demand saw an increase in sectors such as manufacturing, construction, trade, transportation, utilities, and leisure and hospitality. Manufacturing job openings rose to 529,000, and construction vacancies climbed to 298,000, signaling businesses are preparing for sustained production and infrastructure activity. Meanwhile, overall labor turnover remained broadly stable. Total separations edged up slightly, but the quits rate, a key measure of worker confidence, held steady at 1.9 percent. Layoffs and discharges saw a minor increase, but the layoff rate remained low at 1.1 percent, suggesting employers are retaining staff despite softer hiring momentum.

The data points toward a gradual rebalancing of the U.S. labor market after years of exceptionally tight conditions. The combination of stable job openings and restrained layoffs suggests continued demand for labor, mitigating the risk of a significant deterioration in employment. This measured easing in market tightness could contribute to a soft economic landing by helping to contain wage pressures without triggering widespread job losses. The resilience in job vacancies, particularly in manufacturing and construction, is also expected to support broader economic activity in the coming months.