Job openings fell more than expected in March to lowest level in nearly two years
An employee hiring sign with a QR code is seen in a window of a business in Arlington, Virginia, April 7, 2023.
Elizabeth Frantz | Reuters
Employment openings pulled back further in March, hitting a nearly two-year low in a sign that the ultra-tight U.S. job market is loosening and possibly putting less pressure on inflation, the Labor Department reported Tuesday.
The department’s Job Openings and Labor Turnover Survey showed that job vacancies totaled 9.59 million for the month, down from 9.97 million in February and below the FactSet estimate for 9.64 million.
At the same time, layoffs and discharges jumped by 248,000 to just over 1.8 million, taking the rate as a share of the workforce up to 1.2% from 1%.
Though the data set runs a month behind the nonfarm payrolls number, the Federal Reserve watches the JOLTS report closely for signs of labor slack. A lower number is positive for inflation as it indicates less pressure on wages and could ease pressure on the Fed to continue raising interest rates.
However, stocks fell following the release, with the Dow Jones Industrial Average down more than 500 points on the session as investors remained concerned over the state of the economy and news that the U.S. may hit its borrowing limit sooner than expected.
A separate report from the Commerce Department at the same time showed orders for manufactured goods increased 0.9% in March, less than the 1.3% estimate.
The level of job vacancies was the lowest total since April 2021 and cut the ratio of open jobs to available workers to 1.6 to 1 after being around 2 to 1 for most of the past two years or so.
“The Fed should gain some comfort from the gradual decline in this ratio, but also is likely to see this data as reaffirming the need for another rate hike tomorrow,” said Ronald Temple, chief market strategist at Lazard.
Quits, which are considered a measure of worker confidence in the ability to leave one’s job and find another, declined by 129,000 to 3.85 million, the lowest level since May 2021 amid what had been dubbed the Great Resignation.
Hires for the month were unchanged at 6.15 million, while separations rose slightly.
The release comes as the central bank began its two-day policy meeting Tuesday. Markets are assigning a nearly 100% probability that the central bank on Wednesday will announce a 0.25 percentage point rate increase.