US job openings hit 7.59 million in May, topping forecasts

U.S. job openings totaled 7.59 million in May, exceeding economists' expectations by more than 300,000 as the labor market continues to defy forecasts of a slowdown.

"The labor market remains remarkably resilient, and this report gives the Fed little reason to rush into rate cuts," said Sarah Miller, chief U.S. economist at Oxford Economics. "Job openings staying above 7.5 million keeps the pressure on wages and services inflation."

The Bureau of Labor Statistics report showed openings exceeded the 7.29 million median estimate in a Bloomberg survey. April's reading was revised to 7.62 million from a previously reported 7.6 million. The quits rate, a measure of worker confidence, held steady, while hires and separations showed little change from the prior month.

The data complicates the Fed's path to easing as policymakers balance a resilient labor market against inflation that remains above the 2 percent target. The personal consumption expenditures price index, the Fed's preferred inflation gauge, has held above 3 percent, limiting the scope for rate cuts. Markets now assign a lower probability to a September rate reduction, with the 2-year yield rising 3 basis points to 4.139 percent.

Treasury yields moved higher across the curve after the release. The 10-year note yield rose more than 3 basis points to 4.406 percent, while the 30-year bond yield added 2 basis points to 4.888 percent. The moves were modest, suggesting traders had already priced in a relatively strong reading after recent data showed the labor market holding up better than expected.

The last time JOLTS readings exceeded consensus by a similar margin was in January, when openings surged to 8.1 million against expectations of 7.6 million. That report preceded a string of stronger-than-forecast employment data that pushed expectations for the first rate cut from March to June. A repeat of that pattern could push the first Fed cut further into 2026.

Oil prices were little changed, with West Texas Intermediate crude near $71 a barrel and Brent around $73, as energy markets focused on the Middle East ceasefire situation rather than the labor data. The euro slipped below $1.14 against the dollar, extending its decline toward yearly lows as the stronger U.S. data reinforced the dollar's yield advantage.

The ISM manufacturing purchasing managers index for May is due Wednesday, followed by the June employment report on Thursday. Economists expect nonfarm payrolls to have grown by about 175,000, a pace that would keep the unemployment rate near its current level. A reading significantly above that could further diminish hopes for near-term rate relief.

This article is for informational purposes only and does not constitute investment advice.