Chart of the day: Job openings remain near record high

Job openings fell 3.8% to 11.4 million in April amid economic moderation and monetary policy tightening.

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Chart of the day: Job openings remain near record high

REAL ECONOMY BLOG | June 01, 2022 | Authored by RSM US LLP

U.S. job openings fell by 3.8% to 11.4 million in April amid economic moderation and monetary policy tightening, according to Bureau of Labor Statistics data released on Wednesday.

Still, job openings remained near a record high, which puts more pressure on wages and inflation, and adds to the challenge for the Federal Reserve as it tries to cool an overheating economy.

We do not expect the Fed to move away from its plan to raise rates by 50 basis points at each of its next two meetings. Strong data on job openings, however, won’t help to make the case for a potential pause in September.

Job openings

Even if labor demand continues to decline, the current pace won’t suffice in order to tame inflation through the end of the year. It is no secret that the Fed has aimed to aggressively slow down labor demand and economic activities to quash inflation.

The Fed has been watching job openings closely as an important factor in its decision to raise interest rates this year. Fed Chairman Jerome Powell referred in a recent speech to the number of job openings per unemployed workers as an indicator of an unhealthy job market.

In April, there were 1.92 job openings for every unemployed worker, following an upwardly revised 1.99 in March.

Robust demand for labor continued to provide workers more incentives to quit for a new job. The quit rate in April stayed elevated at 2.9%, near the record high 3.0% in December.

Labor turnover

The hiring rate also stayed significantly above the pre-pandemic level at 4.4% in April. The average in 2019 was about 3.9%. Quit and hire rates increased across all firm sizes except for medium-size firms with 50 to 249 employees.

The takeaway

Never before has the job openings report from the Bureau of Labor Statistics become so important to policymakers. While the Fed is trying to front load rate hikes with multiple 50-basis-point increases, it often takes time for these hikes to make their way into the economy.

Reports of hiring freezes and reduced earnings guidance from several companies in the past two months might, however, be an encouraging sign for the Fed in its fight against inflation.

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Call us at (541) 773-6633 (Oregon), (208) 313-7890 (Idaho) or fill out the form below and we’ll contact you to discuss your specific situation.





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This article was written by Tuan Nguyen and originally appeared on 2022-06-01.
2022 RSM US LLP. All rights reserved.
https://realeconomy.rsmus.com/chart-of-the-day-job-openings-remain-near-record-high/

RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/aboutus for more information regarding RSM US LLP and RSM International. The RSM(tm) brandmark is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.

KDP Certified Public Accountants, LLP is a proud member of RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.

Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise, and technical resources.

For more information on how KDP LLP can assist you, please call us at:

Oregon Office:
(541) 773-6633

Idaho Office:
(208) 373-7890

Manufacturing sector grew steadily in May

The manufacturing sector expanded at the slightly faster rate in May as demand remained strong.

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Manufacturing sector grew steadily in May

REAL ECONOMY BLOG | June 01, 2022 | Authored by RSM US LLP

The manufacturing sector expanded at the slightly faster rate in May as demand remained strong, according to data from the Institute for Supply Management on Wednesday.

The data will help alleviate some of the concern over an imminent recession as our recent RSM US Manufacturing Outlook Index dipped into negative territory for the first time in the past two years.

The ISM manufacturing index rose to 56.1 from 55.4 in the prior month, marking the 24th month in a row of expansion since May 2020. A reading above 48.7 for the overall index indicates an expansion in the long run.

ISM manufacturing index

The increase was fueled by strong demand as the new orders subindex grew faster at 55.1 compared to 53.5 in April. As a result, the production subindex also increased on the month to 54.2 from 53.6 a month earlier.

A lot of attention has been focused on the prices paid subindex in recent months as inflation remained a top concern. The series, despite easing in May to 82.2 from 84.6, stayed elevated compared to historical standards. Inventories also grew faster on the month, up to 55.9 from 51.6.

But not all of the subindexes were encouraging. Employment contracted for the first time since November 2020, down to 49.6—a sign of labor market moderation in the manufacturing sector. As demand remained strong, the backlog of orders subindex also grew faster on the month.

The takeaway

We expect the manufacturing sector to stay on a choppy yet downward run in the coming months as economic activities slow down. Whether that run will look more like a smooth one, back to the sustained long-run growth rate, or a steep decline will depend heavily on how the Fed reacts to inflation with rate increases.

Let’s Talk!

Call us at (541) 773-6633 (Oregon), (208) 313-7890 (Idaho) or fill out the form below and we’ll contact you to discuss your specific situation.





  • Topic Name:
  • Should be Empty:

This article was written by Tuan Nguyen and originally appeared on 2022-06-01.
2022 RSM US LLP. All rights reserved.
https://realeconomy.rsmus.com/manufacturing-sector-grew-steadily-in-may/

RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/aboutus for more information regarding RSM US LLP and RSM International. The RSM(tm) brandmark is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.

KDP Certified Public Accountants, LLP is a proud member of RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.

Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise, and technical resources.

For more information on how KDP LLP can assist you, please call us at:

Oregon Office:
(541) 773-6633

Idaho Office:
(208) 373-7890