U.S. job openings rose more than expected in May, led by strong demand in the private sector, even as federal job postings and hires fell sharply—suggesting a labor market rebalancing in line with the Trump administration’s push to shrink the government’s economic footprint.
The number of job openings climbed to 7.77 million, up 374,000 from April, according to Tuesday’s Job Openings and Labor Turnover Survey (JOLTS). Economists had expected a more modest figure of 7.3 million. The rise was driven almost entirely by the private sector, particularly accommodation and food services (+314,000) and finance and insurance (+91,000).
But the federal government reported just 89,000 open positions, a drop of 39,000 in May alone. That figure has fallen by nearly 50 percent since last May. Federal hiring also declined, dropping by 11,000 to just 22,000 new hires, the lowest since early in the pandemic.
Manufacturing job openings increased, particularly in durable goods. Openings also edged up in construction. Openings also rose in healthcare and social assistance.
The slowdown in public-sector hiring comes as President Trump moves to restructure federal operations, aiming to eliminate what he has described as “redundant bureaucracies” and shift services to the private economy. That vision was outlined in a February executive order that capped federal headcount growth and expanded contracting authority across agencies.
Overall hiring in May slipped slightly to 5.50 million, down from a revised 5.62 million in April. Hiring fell in manufacturing (–52,000) and health care (–77,000), while private-sector services largely picked up the slack. This suggests that employers were having trouble attracting workers to open positions, which could mean upward pressure on wages.
Total separations were little changed at 5.24 million, with the quits rate holding at 2.1 percent for the third consecutive month. The layoff rate remained at 1.0 percent.
The job openings rate rose to 4.6 percent, and the number of vacancies per unemployed worker edged up to 1.1—still well below its 2022 peak, but a sign of firming labor demand.
The Labor Department revised April data to reflect slightly stronger conditions than initially reported. April job openings were revised up by 4,000, and hires by 42,000.
While the overall picture points to a resilient labor market, the emerging divide between public and private sector hiring may reflect more than just budget constraints—it may signal a strategic shift in the structure of the post-pandemic economy.
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