United States job openings climbed to a two-year high in May, signalling resilient labour demand, although slower hiring and worsening consumer perceptions of employment suggested the labour market continues to lack momentum.
The U.S. Department of Labor's Bureau of Labor Statistics said job openings increased by 9,000 to 7.594 million on the final day of May, the highest level since May 2024.
The figure exceeded market expectations of 7.30 million vacancies.
However, some economists urged caution when interpreting the Job Openings and Labor Turnover Survey (JOLTS), noting the survey's response rate remained unusually low.
Tuesday's data presented a mixed picture of the labour market, with economists saying employment conditions appeared stable despite subdued hiring activity.
They also said there was little evidence that the recent conflict involving the United States, Israel and Iran had materially affected the labour market, with downside risks seen as easing following the fragile ceasefire.
ANZ analysts said in a note to clients:
"While the labour market has stabilised, it is lacking dynamism. The hiring rate, quits rate and layoffs rate are low relative to history, consistent with a ‘low hire, low fire’ labour market.
"Overall, the recent stabilisation in labour market conditions is encouraging, and reinforces our view that the Fed is on an extended hold, in contrast to current market pricing. However, a resumption of underlying disinflation in coming months will still need to become evident."
The increase in vacancies was concentrated among businesses employing between 10 and 249 workers. Establishments with fewer than 10 employees recorded 132,000 fewer openings.
Industry data showed wholesale trade added 71,000 vacancies, while leisure and hospitality posted an increase of 95,000, driven largely by restaurants and bars. Construction and manufacturing also reported higher demand for workers.
By contrast, vacancies in healthcare and social assistance, one of the largest contributors to recent employment growth, fell by 115,000. Finance and insurance reported 69,000 fewer openings, while transportation, warehousing and utilities shed 43,000 vacancies.
The overall job openings rate remained unchanged at 4.6%.
Hiring fell by 45,000 to 5.170 million in May, although the hiring rate held steady at 3.3%. It marked the second consecutive monthly decline, led by a drop of 40,000 hires in the transportation, warehousing and utilities sector.
Construction and wholesale trade also recorded notable declines in hiring. The weaker hiring figures contrasted with the stronger-than-expected increase in non-farm payrolls during May, extending a run of solid monthly employment gains.
Some economists suggested the divergence could point to revisions to the payroll data.
"We were surprised to see the total hiring rate unchanged and the private hiring rate decline again in May despite stronger May job growth," said Veronica Clark, an economist at Citigroup, as quoted by Reuters.
"This could mean possible revisions lower to May data or weaker net job growth could reflect actions taken in the second half of May. This would suggest softer June employment."
Attention now turns to the June U.S. nonfarm payrolls report, due on Thursday (Friday AEST). Markets expect the economy added 110,000 jobs during the month, following an increase of 172,000 in May.
The unemployment rate is forecast to remain unchanged at 4.3% for a fourth consecutive month.
Separately, the Conference Board reported its Consumer Confidence Index edged up 0.6 points to 91.2 in June from a downwardly revised 90.6 in May.
Despite the modest improvement in overall confidence, consumers became increasingly pessimistic about the labour market.
The proportion of respondents describing jobs as "hard to get" jumped to 22.5% in June, the highest level since January 2021, up from 19.8% in May. The share describing jobs as "plentiful" was little changed at 24.9%.
The labour market differential, which measures the gap between those viewing jobs as plentiful and those finding them difficult to obtain, narrowed sharply to 2.4 from 5.0 in May. The measure has historically been closely correlated with the unemployment rate.
“Consumer confidence inched up in June as falling oil prices in recent weeks provided some relief to consumer inflation fears,” said Dana M Peterson, Chief Economist, The Conference Board.
"Consumers anticipate little change in the labour market six months from now," she added.
Overall consumer confidence received some support from lower fuel prices after the fragile truce between the United States and Iran helped ease pressure on global oil markets, providing relief for households at the petrol pump.
