- Vacancies fall by 632k to 9.9m in February
- layoffs fall by 215,000; voluntary resignations increase by 146,000
WASHINGTON, April 4 (Reuters) – US job vacancies fell to their lowest level in nearly two years in February, suggesting labor market conditions are finally easing, welcome news for the Federal Reserve as it considers expanding its to break the rate hike cycle.
Despite the stronger-than-expected fall in job vacancies reported by the Labor Department on Tuesday, the job market remains tight, with 1.7 vacancies for every unemployed person in February. The drop in job vacancies came ahead of the recent financial market turmoil, which led to tighter credit conditions and sparked fears of widespread job losses in the economy.
“This is another sign that the labor market is cooling, and it’s also a sign that we could see some downward pressure on wage demands and hence cooler inflation,” said Jennifer Lee, senior economist at BMO Capital Markets in Toronto. “However, the labor market is not at the point where the Fed can step back and relax.”
Job vacancies, a measure of labor demand, fell 632,000 to 9.9 million on the last day of February, the lowest level since May 2021, the monthly Vacancy and Labor Turnover Survey, or JOLTS report, showed. January data has been revised down to show 10.6 million job vacancies instead of the 10.8 million previously reported.
Economists polled by Reuters had forecast 10.4 million job vacancies. The decline was led by the professional and business services sector, where job vacancies fell by 278,000. There were 150,000 fewer jobs in health and social services. Job vacancies in the transport, warehousing and utilities sectors fell by 145,000.
But the construction industry was looking for more workers, and job vacancies rose by 129,000. There were another 38,000 job vacancies in the arts, entertainment and recreation sectors.
The job vacancy rate fell to 6.0% from 6.4% in January.
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The Fed raised its benchmark overnight interest rate by a quarter of a point last month, but indicated it was on the verge of suspending further rate hikes amid the turmoil in financial markets. The US Federal Reserve has raised interest rates by 475 basis points since last March from near zero to the current range of 4.75% to 5.00%.
“The labor market was already losing steam before the banking crisis hit the economy in March, and this creates a dangerous situation where tighter credit conditions could lead to actual layoffs in the coming months as companies struggle to keep costs under control get,” said Christopher Rupkey, chief economist at FWDBONDS in New York.
The number of new hires fell to 6.2 million from 6.3 million in January. As a result, the hiring rate fell to 4.0% from 4.1% in the previous month.
Despite a decline in job vacancies, the number of voluntary redundancies rose by 146,000 to 4.0 million. About 115,000 people resigned from the professional and business services sector.
In the hospitality industry, 93,000 employees gave notice, and the wholesale trade reported 31,000 layoffs. About 18,000 education workers resigned in February. But there were fewer layoffs in the finance and insurance sectors, where layoffs fell by 39,000.
The churn rate, which is taken as a measure of job confidence, rose to 2.6% from 2.5% in January.
Layoffs and layoffs fell by 215,000 to 1.5 million.
Reporting by Lucia Mutikani; Edited by Paul Simao
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