The Number Of US Job Openings Falls Below 10 Million For The First Time Since 2021

Employers in the US have faced a reduction in the number of positions available in February compared to the same month last year, leading to less demand in some industries, even as the Federal Reserve continues to warn of too tight a labor market.

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According to the Job Openings and Labor Turnover Survey, or JOLTS, the Labor Department reported Thursday that there were 9.9 million vacant positions, down from 10.6 million a month earlier, a downward revision from a Trade Algo survey of economists that had forecast 10.7 million.

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In spite of the volatility of the figures on a monthly basis, labor supply and demand are now in a better balance, although further progress is required, especially in the service industry, to alleviate wage pressures that have been plaguing workers for several years. In order for the Fed to be able to bring inflation to its 2% goal by the end of the year, it must remain able to maintain a strong job market for the long term.

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After the release of the report, the yield on the two-year Treasury note plummeted as well as the value of the dollar plunged.

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The JOLTS report indicates that voluntary jobless disappearances increased by around 4 million to 2.6% in the last year, a rate that translates into about 4 million Americans. The increase in voluntary jobless disappearances was observed in business services, accommodations and food services, and wholesale trade, as well.

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There were about one million job openings in February, the smallest number since November 2021, while unemployment was almost 1.9 percent, the lowest number since November 2021. Before the pandemic, the ratio of jobs openings to unemployed people was about one million.

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Here is what Bloomberg Economics has to say about...

This month's JOLTS report shows there has been a clear cooling, with labor demand moving closer to matching supply and workers' wages rising faster than the amount of jobs available. The majority of the loosening of the labor market has been a result of fewer job openings, meaning there is less warning of an impending wage-price spiral.

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This ratio is closely monitored by Fed officials, and some have noted it might be possible for them to cool the labor market - and inflation - without causing an employment surge in the process since there are an increased number of job openings.

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While hiring eased, layoffs also declined, which could be attributed to the decrease in business services, health services, and transportation. Openings increased in construction, recreation, and entertainment, and vacancies declined in the health services sector.

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The number of job openings fell in all four western US regions with a decreasing trend in the number of job openings at firms with fewer than 10 employees.

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It's expected that the recent financial turmoil will prompt lenders to further tighten credit conditions, which will stifle consumer spending and business investment, resulting in a reduction in consumer spending. In the coming months, the JOLTS report will serve as an important indicator of the state of the labor market because companies are often hesitant to begin layoffs before freezing hiring.

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It is expected that Friday's monthly employment report will show that employers added nearly a quarter of a million jobs during March, which would remain the lowest unemployment rate since 1965, and that the average hourly earnings will also hold steady at a historically low $3.66 per hour.

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The JOLTS statistics have been questioned by some economists due to the survey's low response rate, which has fallen to about 31% at the end of the year, nearly half the rate it was just three years earlier. This has led them to question the reliability of JOLTS data.