US job openings dropped to their lowest levels since 2021, indicating an easing of labor demand in some sectors but a job market that nevertheless remains tight and is propping up wages.
Job vacancies in February fell to 9.9 million from the previous month’s downwardly revised figure of 10.6 million, according to the Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS, showed Tuesday, which were below all estimates in a Bloomberg survey of economists, Bloomberg News reported.
The largest declines in vacancies hit firms with fewer than 10 workers the most.
Drops included 278,000 in professional and business services, 150,000 in healthcare and social assistance, and 145,000 in transportation, warehousing and utilities.
Vacancies in construction and recreation/entertainment increased by 167,000. With hiring eased, layoffs also declined to 1.5 million.
Despite monthly fluctuations, the latest job market figures mark a better balance between labor supply and demand. But progress is still needed — particularly in the service sector — to alleviate wage pressures. The strong job market remains a challenge for the feds’ goal to bring inflation down to 2%.
In February, the US economy created jobs at a fast pace, with non-farm payrolls increasing by 311,000 jobs, hinting at the feds’ continued efforts to ramp up interest rates.
Following the report, the yield on the two-year Treasury note plunged to 3.97%, leading the dollar to fall to $101.62 Tuesday noon.
The JOLTS report also shows that the quits rate — a measure of voluntary job leavers as a percentage of total employment – rose slightly to 2.6%, which translates to approximately 4 million Americans.
Quits increased by 115,000 in business services, 93,000 in accommodation & food services, and 31,000 in wholesale trade.
The country’s job openings surged to a historic high of 10.1 million in June 2021, The Post previously reported, with companies back then struggling to recruit new employees amid a worker shortage.
The ratio of openings to unemployed people slid to 1.67 in February, the lowest since November 2021, from almost 1.9 in the prior month. In the firm labor market that preceded the pandemic, that ratio was about 1.2.
Fed officials closely monitor this ratio and have highlighted the high number of job openings as a potential reason why the central bank could cool the labor market, and ultimately inflation, without ensuring a surge in unemployment.
Looking forward, the banking sector’s recent turmoil is anticipated to prompt lenders to tighten credit conditions more, a move to restrict consumer spending and suppress business investment.
As companies typically freeze hiring before laying people off, the JOLTS report will be a significant indicator of labor market vigor in the coming months.
The data came before the monthly jobs report on Friday, which is predicted to reveal that employers added almost a quarter-million workers in March.
Economists anticipate that the unemployment rate will remain at a historically low level of 3.6% and that average hourly earnings will rise significantly.
However, some economists have expressed doubts about the reliability of the JOLTS statistics due to the survey’s low response rate.
The response rate for JOLTS dropped to around 31% by the end of the year, which is about half the rate seen just three years earlier.
With Post wires