U.S. job openings hold at 7.6 million, defying forecasts for a drop

U.S. job openings unexpectedly held at 7.6 million in May, defying forecasts for a drop to 7 million and suggesting the labor market remains resilient even as the Iran war weighs on the broader economy.

"The hiring switch needs to fully turn on for the labor market to feel alive again," Nicole Bachaud, economist at ZipRecruiter, said.

Gross hiring slipped to 5.17 million from 5.26 million in April, while quits — a proxy for worker confidence in finding new jobs — edged up to 3.1 million. Layoffs and discharges held at 1.7 million, the Bureau of Labor Statistics reported Tuesday. The hiring rate remained at 3.3%, unchanged from the prior month.

The stable readings reduce pressure on the Federal Reserve to deliver aggressive rate cuts, as the labor market appears to be cooling in an orderly fashion rather than deteriorating rapidly. The 10-year Treasury yield edged higher after the release as traders pared bets on a September rate cut, while the S&P 500 opened little changed. Investors now turn to Thursday's June payrolls report, expected to show 100,000 net new jobs and unemployment at 4.3%.

Hiring Remains Subdued Despite Openings

While employers continue to advertise positions, actual hiring has yet to regain the momentum seen during the post-Covid boom, when gross monthly hiring regularly topped 6 million from mid-2021 to mid-2023. In the first five months of 2026, U.S. employers added an average of roughly 114,000 net jobs a month — a sharp improvement from the 9,700 monthly average in 2025, the weakest pace outside a recession since 2002.

The labor market's resilience comes despite the economic shock from the Iran war, which began after the U.S. and Israel attacked Feb. 28 and Iran retaliated by closing the Strait of Hormuz, through which a fifth of the world's oil and natural gas passes. Energy prices surged, squeezing households already frustrated by high living costs.

Trump's tax cuts and the fact that the U.S. is an energy producer have limited the economic damage, economists said. Meanwhile, baby boomer retirements and the Trump administration's immigration crackdown have reduced the pool of available workers, lowering the so-called break-even rate of hiring — the number of jobs needed each month to keep unemployment stable — to as low as zero, down from roughly 150,000 a year ago.

The last time job openings surprised this far above consensus was in early 2025, when the labor market was still absorbing the initial shock of the Iran conflict. That episode triggered a brief selloff in rate-sensitive sectors as traders repriced Fed expectations. A similar dynamic may be unfolding now, though the muted equity reaction suggests investors are treating the data as confirmation of a soft landing rather than a reason to rethink the rate path.

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