The number of job openings in the US shrank for the second month in a row, setting a new three-year low amid further signals of cooling in the labor market.
There were 8.06 million available jobs posted in April, according to the Bureau of Labor Statistics’ latest Job Openings and Labor Turnover Survey (JOLTS) report released Tuesday. That’s below the downwardly revised 8.36 million seen a month before and the lowest since February 2021.
Economists were expecting job openings to register 8.36 million, according to FactSet estimates.
As of April, there were an estimated 1.2 available jobs for every job seeker. That’s the lowest ratio since June 2021, BLS data shows.
The job market has been historically strong during the past couple of years, providing a firm foundation for hearty consumer spending that has propelled the economy forward despite dueling pressures of elevated inflation and high interest rates.
Layoffs remain low
In addition to the decline in job openings, other measures of labor turnover showed minimal movement in April. The quits rate, which measures voluntary separations as a percentage of total employment, held steady at 2.2% for the sixth consecutive month.
The number of new hires moved up slightly to 5.64 million from 5.62 million; total quits inched higher to 3.51 million from 3.41 million; and layoffs dropped to 1.52 million from 1.6 million in March.
Layoffs are at their lowest level since December 2022.
“The decline in openings points to a slower pace of hiring in the months ahead. However, layoffs remain low, so net job growth should continue to be positive,” Nancy Vanden Houten, lead US economist at Oxford Economics, wrote in a note issued Tuesday.
Job growth has indeed slowed from its breakneck pace during the pandemic recovery. That cooling was apparent in April, when there were only 175,000 jobs added, according to initial BLS estimates.
What the latest jobs data means for the Fed
A slowing of job growth could put the labor market on closer footing to pre-pandemic levels, but it also could mean a slowing in the broader economy. The Federal Reserve, in its battle against high inflation, is wanting to see demand soften and price hikes slow even further before cutting rates.
The Consumer Price Index, the most widely used inflation gauge, showed that the pace of price hikes slowed to 3.4% in April.
“The Federal Reserve will welcome signs of cooler labor market conditions, but the JOLTS data don’t change our view that the Fed will be content to keep interest rates at current levels until September,” Vanden Houten wrote. “The labor market remains healthy enough to allow Fed policy decisions to be primarily guided by readings on inflation.”
The April inflation data was encouraging, she said; however, the Fed “needs to see more than one month of good data before lowering interest rates.”
Still, openings remain above pre-pandemic levels — about 1.09 million higher than in February 2020 and 3.55 million higher than the average from December 2000 to February 2019 — but there are plenty of caveats that come into play with JOLTS.
First, the survey response rates are half what they were 10 years ago (33% in 2024 versus 68% in 2014), although they have picked up somewhat after bottoming out during the pandemic.
Second, the labor market is a different animal than it was 10 or 20 years ago. Labor force participation rates have been on the decline since the turn of the century due to demographic shifts (largely, aging Baby Boomers) and certainly due to pandemic effects (early retirements, deaths, long Covid and caregiving needs).
