(May 5): US job openings were little changed in March and hiring rebounded as the labour market showed continued signs of stabilisation.
Available positions fell slightly to 6.87 million from a revised 6.92 million in February, according to Bureau of Labor Statistics data released on Tuesday. The hiring rate jumped to 3.5% after dropping in February to the lowest level since the onset of the pandemic.
The rebound in hiring echoes the surprisingly robust March jobs report, suggesting some employers were still looking to add workers despite subdued labour demand across much of the economy. While the job market has been in a “low-hire, low-fire” dynamic, some economists have warned elevated cost pressures from the Iran war could weigh on hiring in the months ahead and complicate the Federal Reserve’s policy outlook.
The increase in hiring was broad-based, with advances in transportation and warehousing as well as the information and leisure and hospitality sectors. The pullback in openings was led by professional and business services.
The so-called quits rate, which measures the share of workers voluntarily leaving their jobs each month, ticked up to 2%. The layoffs rate also edged higher, to 1.2%.
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With the number of unemployed people continuing to exceed job openings, the figures reinforce the view among Fed officials that the labour market is not currently a source of inflationary pressure. The ratio of vacancies per unemployed worker, a proxy of the balance between labour demand and supply, was little changed in March at 0.9. At its peak in 2022, the ratio was 2 to 1.
“Despite the increase in March US payrolls, the JOLTS report suggests labour demand is cooling somewhat. Total vacancies declined and the layoff rate increased during the month. That said, the drop in vacancies was largely concentrated in one industry. And the quits rate inched up, signalling workers are more optimistic about their prospects for finding new jobs than they indicated in survey data,” says Stuart Paul at Bloomberg Economics.
The US central bank left interest rates unchanged last week, and Fed chair Jerome Powell cited a labour market showing “more and more signs of stability” as one reason why the central bank didn’t have to rush towards further rate cuts.
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News on the labour market has been mixed in recent weeks, with Meta Platforms Inc and Nike Inc among firms announcing high-profile workforce reductions. But the latest weekly data on unemployment insurance claims showed initial filings fell in late April to the lowest level since 1969, suggesting such layoffs aren’t yet widespread.
A separate report on Tuesday showed employment in the services sector continued to contract in April even as overall activity continued to expand, according to a survey of purchasing managers. Another report showed new home sales picked up in March.
Some economists have questioned the reliability of the JOLTS data, in part due to the survey’s low response rate and sometimes sizable revisions. Another index from the job-posting site Indeed showed openings edged up in April after a sharp drop in March.
The government’s monthly jobs report for April is due on Friday, and economists expect it to show a 65,000 increase in payrolls, according to the median estimate in a Bloomberg survey. That would mark the first set of consecutive monthly increases in almost a year after payrolls rose by 178,000 in March, boosted by the return of striking healthcare workers.
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