U.S. job openings fell more than expected in April to the lowest in more than three years, a sign that labour market conditions are softening in a manner that could help the Federal Reserve’s fight against inflation.
Job openings, a measure of labour demand, were down 296,000 to 8.059 million on the last day of April, the lowest level since February, 2021, the Labour Department’s Bureau of Labor Statistics said on Tuesday in its Job Openings and Labor Turnover Survey, or JOLTS report.
There were 1.24 job openings in April for every job-seeker, the data showed. That was down from 1.3 in March and the lowest since June, 2021, but matched the high-water mark of prepandemic times.
Fed Chair Jerome Powell has often cited this ratio, which peaked near two job openings for every unemployed person, as a measure of labour market slack.
The decline points to “an ongoing normalization between supply and demand for labour,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “From a policy perspective, the Fed’s challenge will be to maintain rates at a level that not only helps keep inflation in check but also prevents a significant weakening in the labour market going forward.”
Data for March was revised slightly lower to show 8.355 million unfilled positions instead of the previously reported 8.488 million. Economists polled by Reuters had forecast 8.355 million job openings in April. Vacancies peaked at a record 12.0 million in March, 2022.
The number of people quitting their jobs rose 98,000 to 3.507 million in April. The quits rate was unchanged from a month earlier at 2.2 per cent, the lowest since September, 2020.
Federal Reserve officials next week are expected to leave the U.S. central bank’s policy rate in the same 5.25 per cent-5.50 per cent range where it has been since last July. They have said a rate cut will likely wait until data shows inflation, after a stronger-than-expected run during the first quarter, is headed back down toward their 2 per cent goal. Fed officials have said that only an unexpected and meaningful weakening of the labour market could trigger a rate cut sooner than otherwise.
They have so far welcomed evidence of labour market cooling as a sign of a rebalancing that eases upward pressure on prices.
Financial markets are pricing in a first Fed rate cut in September, and a second one in December.
A separate report out Tuesday showed orders for U.S.-manufactured goods increased for a third straight month in April, boosted by demand for transportation equipment.