Job openings fell more than expected in April, signaling a potential weakening in the labor market and potentially giving the Federal Reserve further impetus to start cutting interest rates.
The number of job openings fell to 8.06 million this month, down nearly 300,000 from March and down nearly 19 percent from a year ago, according to the Labor Ministry’s Job Vacancies and Labor Mobility Survey released Tuesday.
Moreover, the total number was the lowest since February 2021. The ratio of job openings to available workforce numbers has fallen slightly from 1.2 to 1, which was about 2 to 1 when job openings peaked at more than 12 million in March 2022. The ratio is back to pre-COVID levels.
Fed officials are closely watching the JOLTS report for signs of labor market slack as they gauge the direction of monetary policy. Policymakers are keeping benchmark interest rates at their highest in 23 years while waiting for more compelling evidence that inflation is recovering toward the central bank’s 2% target. Markets are pricing in the first rate cut in September.
Although the number of job openings fell, hiring increased slightly and the number of people quitting or retiring also increased, a sign that workers are confident they can move on to other jobs.
Information technology saw the largest decline in job openings, down 1.3% this month. Two industries that had seen strong employment growth, health care and leisure and hospitality, saw notable declines, with job openings falling 0.8% and 0.6%, respectively.
The Bureau of Labor Statistics report caps off a big week of labor-related data.
On Wednesday, ADP will release its forecast for private sector payrolls for May; Dow Jones expects 175,000 in May, down from 192,000 in April. On Thursday, weekly jobless claims data will be released; and on Friday, the BLS will release the key nonfarm payrolls for May, which are expected to increase by 190,000 from 175,000 last month.
