Don’t look now, but job openings across the US economy just jumped the most since November.
I suppose “just” is misleading. The JOLTS release comes on a two-month delay. So, Tuesday’s consensus-topping 7.769 million headline reflected open positions on the final business day of May.
Dated or not (it’s dated) the overshoot’s well worth a mention. Consensus expected 7.3 million from the readout, and the headline now sits at the highest this year.
May marked the second straight monthly increase in openings. Hires, meanwhile, slipped and remain stuck in a familiar range.
The 374,000 “jolt” to the headline (that joke’s so bad I almost didn’t use it) was attributable almost entirely to the leisure and hospitality sector.
I won’t pretend to know what, exactly, accounted for the spike in May, but absent additional information or color from the BLS, it’s not unreasonable to ask if Donald Trump’s immigration crackdown might be impacting industries with a high concentration of Hispanic workers.
As the figure below shows, the 279,000 month-to-month gain was the largest ever if you don’t count the spike in May of 2020, when the sector was desperate to rehire after mass layoffs associated with the onset of the pandemic.
Quits in that sector of the economy rose a sixth month to the highest since January of 2024 and layoffs fell.
Again, I’m very cautious when it comes to sudden spikes in these data series. More often than not, there’s a methodological explanation or some other factor that I just miss initially because I’m compelled to pen my analysis in real-time.
But if immigration policy ends up impacting leisure and hospitality, those jobs will be hard to fill because most Americans won’t want them. In some cases, we’re talking about very menial work: Dish-washing, towel-folding and so on.
The two-category breakdown for leisure and hospitality shows the increase in openings was entirely attributable to accommodation and food services.
The figure above shows the seasonally adjusted openings rate rose two full percentage points in May for that category, a mile beyond any historical MoM increase excluding May of 2020 and by far the biggest MoM jump of any category in Tuesday’s report.
Just like the leisure and hospitality supersector it falls under, accommodation and food services saw hires and quits rise and layoffs fall.
Elsewhere in Tuesday’s JOLTS release, overall quits rose, as did the quit rate. And the openings to unemployed ratio monitored by the Fed rose to 1.07 from 1.03, the highest since January.
My my, what a big surprise! It’s almost a black swan event.
Whodahunkit?
Too bad JOLTS data isn’t granular enough to drill down on industries with high pct of undocumenteds – agriculture, construction, etc. Or maybe it is, I haven’t spent much time poking around there.
I see the “pause” on raids at hotels etc lasted just days. https://www.cbsnews.com/news/trump-ice-farms-hotels-restaurants/
I have to agree with you Derek. What rationale did the decision makers use to decide the ICE raids would raise up the American economy. Did they really believe American workers just couldn’t wait to do menial labor. Just wait until no one is cleaning public restrooms. Those will be exciting times. If you’re on medicaid and need a job to qualify in the near future, you know what Trump has in mind for you.
I live in SoCal, and from this perspective it is definitely the ICE raids, or even just the fear of them. I have heard several anecdotal stories of local immigrants simply walking away from jobs rather than risking getting caught. Gardeners and wait staff not showing up and the like. (There is your increased quit rate perhaps too.) Local municipalities are even cancelling 4th of July celebrations in order to prevent raids on the large gathered crowds. The inner-city school district I used to work for is cutting its budget due to declining enrollment projections. Sad times really.
If ICE bounty hunters are snatching brown-skinned people off buses and at stoplights and gas stations on their way to/from work, not snatching them once they are actually inside the hotel, meatpacker, farm, etc isn’t going to help that much.
Still, interesting that industry couldn’t get the “pause” to stick. Wonder if Trump has unleashed something he can’t fully control.
Where I live, our Haitian community has become petrified. ICE, with local police, have stopped them for as little as failing to come to a complete stop at an intersection, while riding their bicycles to work in the morning. White bicyclists get a pass for not following the same rules. Dozens have already been whisked away by masked ICE agents to a detention camp where the living conditions are deplorable. They are afraid to go to work, buy groceries, attend church, or take their kids to school. Local charitable groups are in overdrive trying to provide food and laundry deliveries. Local business and community leaders have attempted to mobilize and speak out about the new relationship between ICE and local law enforcement (287(g) Program. City leaders are being forced to confront this force which is a wrecking ball for the local economy and inhumane, and un-American IMHO. Once Temporary Protected Status ends in the US on Sept. 2 this year, over 5,000 Haitians in our community will actually become “illegal”. It’s hard to fathom what happens next. And we are a tiny community and I know this is happening all across the US. How do labor rates not skyrocket? I guess a cratered economy could be the solution. Project 2025 is alive. And very well. It’s time the good people in the US, who don’t subscibe to it’s mission, wake up and grasp what is at stake. If you already feel like you don’t recognize your country anymore, you haven’t seen anything yet because they’ve only just begun.
H-Man, our youngest does commercial landscaping in Florida, no one wants to work because of the fear of a raid on the construction site.
Some Americans like to say that we are all immigrants, and it looks like Trump’s gonna put that to a literal field test. Even assuming Americans are willing to do the work of snatched-up immigrants, I’ll make a lazy prediction that they ain’t gonna do it well. We’ve gone from everything’s computer to everything’s not clean, maintained, or coded correctly, but, as we have learned, winning in the modern era takes weird forms.