US job openings fall, layoffs jump, indicating softer labour market

VACANCIES at US employers fell in March by more than forecast and layoffs jumped, indicating softening demand for workers.

The number of available positions decreased to 9.59 million from nearly 10 million a month earlier, the Labor Department’s Job Openings and Labor Turnover Survey, or Jolts, showed on Tuesday (May 2). The median estimate in a Bloomberg survey of economists called for 9.7 million.

The data point to a gradual moderation in labour demand, which should eventually bring the job market into better balance and alleviate upward pressure on wages. While some companies – notably in technology and finance – have cut employees, the labour market as a whole remains resilient and has been a stalwart between the US and recession.

Layoffs jumped to the highest level since December 2020, led by construction, accommodation and food services and health care. The level of quits also eased, indicating budding concerns about job security.

The so-called quits rate, which measures voluntary job leavers as a share of total employment, edged down to 2.5 per cent, matching the lowest in two years. That equates to about 3.9 million Americans and reflected a drop among workers in accommodation and food services. 

The ratio of openings to unemployed people ticked down to 1.6 in March, the lowest since October 2021. In the firm labour market that preceded the pandemic, that ratio was about 1.2.

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Fed officials watch that ratio closely and have pointed to the elevated number of job openings as a reason why the central bank may be able to cool the labour market – and therefore inflation – without an ensuing surge in unemployment. That said, central bank staffers are forecasting a recession later this year.

The data come at the start of the Fed’s two-day meeting in Washington, in which officials are broadly expected to raise interest rates for possibly the final time of this cycle. BLOOMBERG