BY LUCIA MUTIKANI
WASHINGTON — US job openings unexpectedly increased in May, but a decline in hiring added to signs that the labor market had shifted into lower gear amid uncertainty over the Trump administration’s tariffs on imports, with a 90-day pause on higher reciprocal duties drawing to an end.
Anxiety over trade policy and ebbing labor market momentum was underscored by a survey from the Institute for Supply Management (ISM) on Tuesday, with manufacturers variously describing the business environment as “hellacious” and “too volatile” for long-term procurement decisions.
Economists were mostly dismissive of the surprise rise in job openings, noting that the bulk of the increase was in the leisure and hospitality sector.
“We suspect underlying demand for new workers continues to recede amid growing signs of consumer spending fatigue,” said Sarah House, a senior economist at Wells Fargo.
Job openings, a measure of labor demand, were up 374,000 to 7.769 million by the last day of May, the Labor Department’s Bureau of Labor Statistics said in its Job Openings and Labor Turnover Survey, or JOLTS report. Economists polled by Reuters had forecast 7.30 million vacancies. There were 1.07 jobs for every unemployed person, up from 1.03 in April.
Accommodation and food services open positions surged 314,000. There were 91,000 unfilled jobs in finance and insurance. Job openings increased 60,000 in transportation, warehousing and utilities. There were an additional 60,000 vacancies in healthcare and social assistance.
But federal government job openings decreased 39,000 amid the White House’s hiring freeze. The job openings rate rose to 4.6 percent from 4.4 percent in April.
Hiring, however, decreased 112,000 to 5.503 million, with declines concentrated in healthcare and social assistance, manufacturing as well as professional and business services. But hiring surged by 107,000 in accommodation and food services. The hires rate fell to 3.4 percent from 3.5 percent.
Economists say the lack of clarity on what happens after July 9, when the 90-day pause on President Donald Trump’s reciprocal tariffs expires, had left businesses unable to make long-term plans. A 90-day temporary reduction in tariffs between the US and China is due to end in mid-August. Treasury Secretary Scott Bessent said on Monday that trade partners could still face sharply higher tariffs next Wednesday.
Economists said the JOLTS report suggested the Federal Reserve could wait until September to resume cutting interest rates. The US central bank last month left its benchmark overnight interest rate in the 4.25 percent-4.50 percent range where it has been since December.
Fed Chair Jerome Powell on Tuesday reiterated the central bank plans to “wait and learn more” about the impact of tariffs on inflation before lowering interest rates.
