Hiring in a holding pattern

July 6, 2026

Job openings were unchanged at 7.6 million in May, holding at the nearly two-year high reached in April. A year ago, openings stood at 7.3 million. April's outsized gain, driven by a record surge in professional and business services postings, was trimmed only slightly in revision. That is according to the government's Job Openings and Labor Turnover Survey (JOLTS). Professional business services have done a U-turn in recent months and added to employment gains after a long hiatus in 2025 and early 2026. 

There was one job opening for every unemployed job seeker in May, as the ratio between the two held at 1.0. Federal Reserve officials watch this measure as a gauge of labor market balance, and it has not strayed far from parity in over a year. It suggests a labor market roughly in balance, although those figures mask an undercurrent beneath the surface. 

The unemployment rate dipped to 4.2% in June from 4.3% in May. Nearly all of that drop was due to a loss in participation among young workers – 25-29 years old. That reflects a poor summer for seasonal hires. Leisure and hospitality lost ground in June after a spurt in May, which was revised lower. 

Openings rose most in leisure and hospitality (+95,000), which did not show up in the June employment report. There still could be hope for July, given the surge in tourism associated with the FIFA World Cup games. Wholesale trade added 71,000 openings. 

Health care and social assistance openings fell 115,000, while finance and insurance openings dropped by 69,000. The former is worrisome, given the outsized role that healthcare and social assistance has played in supporting job gains. 

Hires were barely changed at 5.2 million, with the hiring rate steady at 3.3%. On a three-month moving average basis, which cuts through the month-to-month volatility, hiring stood at 3.4%, barely off the 3.3% pace that has held since July 2025. Hiring in the private sector was down by 77,000, while government hiring picked up 32,000 in the month, mostly at the state and local levels. That showed up as a bump in employment at the local level in May but lost momentum in June. 

Layoffs ticked up slightly to 1.7 million, with the rate at 1.1%; the three-month moving average also held at 1.1%. The layoff spikes in information and professional and business services in March have slowed, with both industries seeing lower layoffs for a second straight month. 

The unemployment rate in the information sector is among the most telling. It has risen from an all-time low of 1.4% in April 2023 to 5.1% in June, well above the overall unemployment rate. It is rare for the unemployment rate in this sector to linger above the national average. The last time it did that for any length of time was in the wake of the tech bubble bursting in the early 2000s. 

Layoffs picked up the most in health care and social assistance, reflecting a loss in insurance coverage. Medicaid restrictions at the state level have kicked in, while COVID-era subsidies for the Affordable Care Act have lapsed. 

Layoffs were up in construction and retail trade as well. Retail shed jobs in June.

Quits held at 3.1 million, with the rate at 1.9% for a second month, the low end of the narrow band it has occupied for two years. The three-month moving average stood at 1.9%. Workers are staying put and pay data show why: wage growth for job stayers was flat in May and essentially unchanged over the past year, while gains for job changers slipped, according to ADP. The premium for switching jobs is eroding. 

Forward-looking indicators point in the same direction. Postings data from Indeed Hiring Lab, which tend to lead the official openings figures, have declined since March and sit roughly where they were in late 2025, suggesting openings have little room to climb from here.