The June Job Openings and Labor Turnover Summary report is out, and once again the number of health care and social assistance job openings was far greater — by a factor of more than two-to-one — than the number of those jobs filled during the month.
By the numbers, the number of job openings continued to rise month-over-month, reaching 2.05 million, the highest level since February. That pushed the job opening rate for the category back over 9% vs. 8.7%-8.8% in April and May. To put that into perspective, the number of health care and social assistance job hires inched ahead to 3.9% in June vs. 3.8% the previous month, as the number of those hired climbed to 796,000. We’d also note the number of job quits in the healthcare and social assistance category ticked higher during June to 561,000, which equates to a quit rate of 2.7%, a few basis points higher than June 2021.
Summing up the data, despite recent comments made by HCA Healthcare (HCA) that it saw declines in its health care contract labor during the quarter, the demand for contract health care labor continues to be stronger than expected. This sets the stage for a positive earnings report from AMN Healthcare (AMN) later this week. On the company’s earnings conference call, we expect it will continue to share expectations for contract labor to return to more normalized levels.
But with reports that hospitalizations associated with the BA.5 variant of the coronavirus have soared and California joining the ranks of Illinois and New York declaring health emergencies due to the monkey pox outbreak, demand for health care contract labor is likely to remain strong as we move through the current quarter.
Our price target on AMN shares is $125, a smidge below the consensus price target of $137, which means we could adjust our target higher based on continued strength in the data.