JOLTS, Housing Rebound and PMI Readings Moderate — Evening Brief – 05.05.26
The U.S. economy is showing signs of moderation rather than deterioration, as a cooling labor market, resilient housing activity and slowing but still expanding services sector paint a picture of uneven but ongoing growth.
Job openings fell modestly to 6.866 million in March from a revised 6.922 million in February, according to the Job Openings and Labor Turnover Survey (JOLTS) from Bureau of Labor Statistics. While the decline reflects softer demand, particularly in professional and business services, which dropped by 318,000, it came in above expectations, suggesting the labor market remains stable despite heightened uncertainty tied to the Iran conflict.
Other labor indicators were more constructive. Hiring rebounded sharply to 5.554 million, lifting the hires rate to 3.5%, while the quits rate edged up to 2.0%, a sign workers retain some confidence in job mobility. At the same time, layoffs increased to 1.867 million, nudging the layoffs rate to 1.2%, pointing to a gradual normalization rather than a sharp deterioration.
Housing data offered a brighter signal. New home sales rose 7.4% month-over-month to 682,000 in March, topping consensus estimates, even as prices declined. The median sales price fell 6.2% year-over-year to $387,400, suggesting improved affordability is helping support demand.
Meanwhile, activity in the services sector continues to expand, though at a slower pace. The Institute for Supply Management reported its Services PMI at 53.6 in April while the S&P Global U.S. Composite PMI was 51.7, slightly below the 52.0 flash estimate but up from 50.3 in March.
The S&P Global U.S. Composite PMI showed a rebound in services activity alongside firmer manufacturing growth, though gains in new orders and employment remained modest. Business confidence improved from March levels, signaling a somewhat stronger outlook despite uneven demand trends.
At the same time, inflationary pressures intensified. Input costs rose at their fastest pace of 2026 to date, while selling prices increased at the sharpest rate in nine months, underscoring persistent pricing power even as overall growth moderates.