The count of open, unfilled jobs moved lower in May, indicating an ongoing but gradual cooling of macroeconomic conditions. While the count of open jobs (9.8 million) is significantly lower than the count of 11.4 million in May 2022, it is still some ways removed from the ideal range of 8 million, according to an analysis by the NAHB.
The count of total job openings will continue to fall in 2023 as the labor market softens and the unemployment rises. From a monetary policy perspective, ideally the count of open, unfilled positions slows to the 8 million range in the coming quarters as the Fed’s actions cool inflation.
While higher interest rates are having 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 can be found. Good news for the labor market does not automatically imply bad news for inflation.
The construction labor market saw an increase for job openings in May, although this occurred off of downwardly revised April estimates. The count of open construction jobs increased from a revised reading of 347,000 in April to 366,000 in May. These data come after a data series high of 488,000 in December 2022. The overall trend is one of cooling for open construction sector jobs as the housing market slows and backlog is reduced, with a notable uptick in month-to-month volatility since late last year.
