The Bureau of Labor Statistics reported that job openings in the manufacturing sector pulled back in May from April’s pace, which was the best reading since January 2001. Manufacturers posted 441,000 job openings in May, down slightly from 452,000 in April. In the latest figures, there were fewer job openings in both the durable (down from 281,000 to 272,000) and nondurable (down from 171,000 to 169,000) goods sectors. More importantly, the number of manufacturing job postings has remained highly elevated even with the easing in May, exceeding 400,000 for the fifth consecutive month (and in nine of the past 12 months). Monthly job openings in the sector have averaged 430,400 year-to-date in 2018, up from averages of 341,250 and 389,667 for all of 2016 and 2017, respectively. Moving forward, continued strength in job openings is anticipated in the coming months.
Net hiring among manufacturers remains encouraging, even with some slower activity over the past few months. There were 346,000 hires in the sector in May, down from 358,000 in April. Hiring eased a bit for both durable (down from 213,000 to 202,000) and nondurable (down from 145,000 to 143,000) goods manufacturers, but the numbers have still trended in the right direction. At the same time, total separations—including layoffs, quits and retirements—declined from 343,000 to 333,000. As a result, net hiring (or hires minus separations) edged down from 15,000 in April to 13,000 in May. It was the 13th consecutive monthly increase in manufacturing net hiring, averaging 18,538 over that time frame.
Meanwhile, job openings for nonfarm payroll businesses declined from April’s all-time high, dropping from 6,840,000 in April to 6,638,000 in May. It remained the second-highest reading, however, and job openings in the U.S. economy continued to exceed the number of people looking for work (6,065,000 in May and 6,564,000 in June). This is a sign of a very tight labor market and helps to explain why workforce recruitment and retention are such large challenges right now.