The Great Resignation is still in full swing as new labor market data reveals that there were nearly 11.3 million job openings in the month of May. While this is a slight decline from the record 11.6 million openings in April, there are still almost two jobs available for every person who is unemployed. Ryan Sweet, co-host on the "Inside Economics" podcast and director of real-time analytics at Moody's, joined Cheddar News' "Opening Bell" to discuss the state of the U.S. labor market.

Opening Bell

Job Openings Fall Slightly to 11.3 Million, Still Remain Near Highs

more on this. It's bringing Ryan Sweet co host on the Inside Economics podcast and director of real time analytics at moody's Ryan, thank you so much for joining us. Um Job openings that did take down a bit from last month's record high, right? 11.3 million versus 11.6 million. I have a two part question for you. Why don't we see that decline? Is that a result of people taking positions or employers taking those positions off the market and then be, what does this tell you about the state of the labor market at this time? Thanks for having me. I think the answer to your first question is it's both we've seen solid hiring creating 400 500,000 jobs per month on average. That's that's a lot that's a very strong labor market. So even though it's still very difficult to fill a lot of these open positions that businesses are still successful. But I also think businesses are starting to pull uh openings off their kind of announcing higher increases here and there because it seems like everyone's got a recession on on top of mind. C. E. O. S are saying a recession is coming, economists are saying no recession risks are rising. So I think that both behavior so when business confidence declines when there's a lot of chatter about recessions, the first thing businesses do cut back on hiring, come back on hours work and then eventually start laying off workers. But in our baseline forecast, we don't expect layoffs to increase uh at a significant rate anytime soon. This week is really the week of kind of a broader labor picture being painted right, we got the jobs report out yesterday, we got jobless claims today and then tomorrow we get the, the monthly jobs report in particularly with jobless claims, those unexpectedly increased last week claims remaining at a six month high, although they are kind of closer to pre pandemic levels. Do you think we're gonna continue to see an uptick in these unemployment claims? So, initial claims for unemployment insurance benefits is one of my favorite economic indicators. It can be volatile from week to week. So that's why I always look at the four week moving average and the trend you're spot on. It's, it's weakened a little bit. But still claims are very low. Uh kind of give you a threshold claims would have to be north of 250 closer to 300,000 on a sustained basis to raise any red flag that, you know, businesses are laying off workers in larger and larger numbers. I mean, I think that overall the job market is red hot. That's something that is, You know, getting the Feds attention. They want job growth to slow, they want monthly job growth to go from 400,500,000 jobs or 500,000 per month down closer to 100, And that will kind of help the Fed achieve the softest landing. If we keep creating, you know, 400 500,000 jobs per month. The labor market's gonna overheat. And that's a recipe for for a recession. So as growth slows we're gonna see you know some more layoffs but nothing where I think that would plant the seeds for a recession. You know many people left the labor force during the pandemic. And the biggest issue is that many of those people still haven't returned. Do you expect those who quit their jobs or retired early to come back into the workforce or will these kind of job openings continue to remain at high levels as a result of the great resignation. I know in the jolt report out yesterday we saw that tick down a little bit but you're still over four million people converting or quitting their jobs. And I think that's a testament to the strength of the economy. I mean normally in the labor market in particular you don't quit your job if you're worried about you know finding a new one or worried about your job security. So I think this is just a reflection of you know the underlying strength of the economy recession warning signs aren't anywhere except for in the financial markets. And in G. D. P. The job market rick roaring it's gonna continue to remain strong. But I do think these job openings are going to steadily decline because right now as you mentioned we have more than 11 million pre pandemic is closer to seven million. So we have a boatload of job openings. But as the economy slows down, I think some of these will be removed by businesses or we're going to still continue to fill open positions. And it's easier because the solution to our labor supply issue is strong wage growth and wage growth, not over age group has been accelerating and that's gonna pull more people back into the labor force. And also with the pandemic, hopefully, you know, winding down and ending soon, that will remove a big barrier for a lot of women. People caring for Children and their parents Allow them to come back into the labor force in larger and larger numbers. So I think our labor supply problems will become less binding over the next 6, 12 months. You know, one of the things that we've seen as of recently is we've seen a lot of layoffs across, you know, different slew of companies, a lot of them happening kind of in the tech sector. Now, do you expect to continue to see layoffs or is there any sentiment that companies can't afford to lose workers amid kind of the situation where we have millions of jobs unfulfilled? You're seeing layoffs in tech, you're seeing layoffs in mortgage lending and that's just a reflection of the state of the housing market. You know, we have mortgage rates jump, they're north of 6% recently, that's taken a lot of steam out of, of home sales refinancing activity. So I think those are areas where you'll see continued weakness and layoffs, but you know, looking back in overall, you know, businesses are affording labor because they know how difficult it is to fill these positions. So until they kind of see the whites of recessions eyes, they're gonna keep these workers on board and you know, our forecast is for the economy slowed down, but we'll skirt a recession so we'll keep the unemployed south of 4% you know, for the rest of this year and next year. And we'll see the unemployment rate starts to tick up as the economy continues to uh rebalance. I imagine from the employee's perspective, they're hoping that employers have learned their lesson after they were so quick to kind of let people go at the beginning of the pandemic and then realize, oh, it's not that easy just to rehire them and get them to come back. Ryan Sweet, really appreciate your time and your insight, Ryan Sweet, co host on the Inside Economics podcast and director of real time analytics and moody's