BofA Securities head of U.S. economics Michael Gapen discusses whether the April jobs report will change the Fed’s interest rate decision on ‘Making Money.’
U.S. job openings sank in April to the lowest level in more than three years, the latest sign that the labor market is cooling off as the economy slows.
The Labor Department said Tuesday there were 8.1 million job openings in April, a decrease from the downwardly revised 8.35 million openings reported the previous month. Economists surveyed by LSEG expected a reading of 8.3 million.
It marked the lowest level for job openings since February 2021.
THE NUMBER OF HIGH-PAYING JOBS IS DWINDLING
Elementary school educators gather to talk to prospective hires during a hiring event for Prince George’s County school district hosted at Dr. Henry A. Wise Jr. High School in Upper Marlboro, Maryland, on Aug. 2, 2023. (Amanda Andrade-Rhoades/For The Washington Post via Getty Images / Getty Images)
The labor market has remained historically tight over the past year, defying economists’ expectations for a slowdown. Economists anticipate the labor market will continue to cool in coming months as higher interest rates work their way through the economy.
The Federal Reserve raised interest rates 11 times beginning in March 2022 in an effort to rein in inflation and cool the labor market. Policymakers have suggested that fast wage growth — the product of a strong labor market — was a contributing factor to the inflation crisis that ravaged millions of Americans’ pocketbooks over the past few years.
AMERICANS IN THESE STATES ARE GETTING A PAY RAISE THIS YEAR
Tuesday’s report is the latest sign that the labor market is beginning to weaken in the face of higher interest rates and stubborn inflation.
“The April JOLTS numbers are another in a streak of recent releases demonstrating cooling economic momentum,” said Oren Klachkin, Nationwide financial market economist. “The job market may be moderating, but there is an important distinction between growing at a cooler pace and contraction; we don’t see evidence of the latter.”
Signage for a job fair is seen on 5th Ave. in Manhattan, New York City, on Sept. 3, 2021. (Reuters/Andrew Kelly / Reuters Photos)
Still, job openings remain historically high. Before the COVID-19 pandemic began in early 2020, the highest on record was 7.6 million. There are roughly 1.2 jobs per unemployed American – the lowest ratio since June 2021.
In addition to a decline in job openings, the report also showed that the number of Americans quitting their jobs ticked slightly higher to 3.5 million, or roughly 2.2% of the workforce. That suggests workers remain confident they can leave their jobs and find employment elsewhere.
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Layoffs, meanwhile, dropped to 1.52 million, the lowest level since December 2022.
