Job openings in April fell to the lowest level in more than three years, a sign that the labor market is cooling as the Federal Reserve keeps interest rates high.
Job openings fell 5% in April to just under 8.1 million, a decline of about 19% from a year ago, the Bureau of Labor Statistics reported in an update to the Job Openings and Labor Turnover Survey. That marks the least monthly job openings since February 2021, when the labor market was still struggling to bounce back from pandemic-related disturbances.
Openings fell below expectations, continuing a trend of slowly declining job openings over the past couple of years. The drop is a sign that the jobs market is beginning to soften under the weight of the Federal Reserve’s tightening.
“The decline in openings points to a slower pace of hiring in the months ahead,” economists from Oxford Economics wrote in a note on the report. “However, layoffs remain low, so net job growth should continue to be positive.”
About 3.5 million workers quit their jobs in April, little changed from the month before. The figure is equivalent to about 2.2% of the workforce.
The “quits rate” measures the share of people who voluntarily left their jobs and includes those who left their previous employment for another job and people who quit but are confident they will soon find new employment.
Also of note in Tuesday’s JOLTS report, layoffs and discharges were little changed, at 1.5 million in April.
For context, monthly job openings peaked in March 2022, the first month the Fed hiked interest rates, at over 12 million, so the most recent numbers mark a 33% decline from that time.
Despite falling to their lowest level in more than three years, the decline has been relatively slow and hasn’t shown massive decreases that might raise concerns that the labor market is seriously getting whacked.
Job openings decreased the most in the healthcare industry, falling by 204,000, and in state and local government education, which had 59,000 fewer openings.
Despite the signs of softening in the latest JOLTS report, the labor market has remained relatively resilient even as the Fed has raised interest rates. The economy added 175,000 jobs in April, and the unemployment rate remained below 4%, which is low by historical standards.
The latest jobs report will be released on Friday, and economists expect growth to remain positive.
“Payroll growth is expected to be close to April’s increase of 175,000 jobs,” said Mark Hamrick, senior economic analyst at Bankrate. “This consistent performance supports incomes and household finances. Even so, folks are still agitated and financially pressured by prices and interest rates.”
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GDP growth has also remained positive. The Bureau of Economic Analysis found that GDP expanded at a 1.3% seasonally adjusted annual rate in the first quarter of this year.
While economic growth remained positive in the first quarter, the slowdown is a notable drop from the preceding quarter, when GDP grew at a healthy 3.4% clip.