Job openings plunge to lowest level in more than three years – Washington Examiner

Job openings fell 3.7% in March to just under 8.5 million, the lowest level of openings since February 2021.

The new numbers, including openings across all sectors for that month, were released as part of the Job Openings and Labor Turnover Survey, which was updated by the Bureau of Labor Statistics on Wednesday. They fell below expectations, continuing a trend of slowly declining job openings over the past few years.

The drop could be a signal that the labor market is beginning to soften under the weight of the Federal Reserve’s high interest rates.

“Net, net, the economic news is not quite as hot and is actually noticeably cooler for the labor market, where job openings are less plentiful,” said Chris Rupkey, chief economist at FWDBONDS. “Manufacturing is back in a recession, according to purchasing managers, and private business construction is lower, led by power projects and commercial premises.”

About 3.3 million workers quit their jobs in March, little changed from the month before, but down 480,000 over the year. The figure is equivalent to about 2.1% of the workforce.

The “quits rate” measures the share of people who voluntarily left their jobs, and it includes those who left their previous employment for another job and people who quit but are confident they will soon find new employment, given the tightness in the labor market.

Also of note in Wednesday’s JOLTS report, layoffs and discharges were little changed at 1.5 million in March.

For context, monthly job openings peaked in March 2022, the first month the Fed hiked interest rates, at over 12 million, so the most recent numbers mark a 30% decline from that time.

Still, despite falling to their lowest level in more than three years, the decline has been relatively slow and has not included huge drops that might raise concerns that the labor market is seriously getting whacked.

Nick Bunker, economic research director for North America for Indeed Hiring Lab, said Wednesday that the moderation is “mostly sustainable for the time being.”

“But now some two years after the peak in job openings and the sustained slowdown that followed, the next phase of the cooldown is coming into sharper focus — and how it unfolds will depend a lot on how demand for workers evolves over the next few months,” Bunker added.

Job openings decreased the most in the construction industry, falling by 182,000 and marking a 40% decline from the month before. Job openings in the insurance and finance space also fell by 158,000.

Despite the signs of softening in the latest JOLTS report, the labor market has remained resilient despite the Fed’s rate hikes. The economy beat expectations again in March and added more than 300,000 jobs. The unemployment rate is at 3.8%, right around pre-pandemic levels.

Friday’s employment report, which will show how the labor market performed in April. Economists are predicting a slight pullback in hiring, although still expect job growth to remain above 240,000.

The Fed has kept interest rates at the high level they are at now since July in an effort to tamp down inflation. However, recent inflation reports have indicated that there is still a way to go in combatting the price growth.

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While just five months ago, investors were anticipating up to six rate cuts in 2024, now the consensus is that a rate cut will not come until after the November elections, if at all.

The strong labor market has afforded the Fed some leeway in keeping interest rates higher for longer. If the latest jobs report shows a major slowdown in the labor market, it could signal that the rate hikes are beginning to hit employment, something that would start ringing alarm bells at the Fed.