US job openings drop, layoffs at highest level in over 2 years

US job openings drop, layoffs at highest level in over 2 years

WASHINGTON--U.S. job openings fell for a third straight month in March and layoffs increased to the highest level in more than two years, suggesting some softening in the labour market that could aid the Federal Reserve's fight against inflation. Still, the labour market remains tight, with the monthly Job Openings and Labor Turnover Survey, or JOLTS report, from the Labor Department on Tuesday showing 1.6 vacancies for every unemployed person in March. That was the lowest reading since October 2021 and compared to 1.7 in February. Fed officials, who started a two-day policy meeting on Tuesday, are closely watching this ratio, which remains above the 1.0-1.2 range that economists say is consistent with a jobs market that is not generating too much inflation. The U.S. central bank is expected to raise its benchmark overnight interest rate by another 25 basis points to the 5.00%-5.25% range on Wednesday before potentially pausing its fastest monetary policy tightening campaign since the 1980s. "The decline in the ratio of job vacancies to unemployment in the last three months represents a reduction in the excess demand for labour that will be welcomed by the Fed," said Conrad DeQuadros, senior economic advisor at Brean Capital in New York. "However, with the ratio still higher than at any time prior to November 2021, the labour market is still tight by historical standards." Job openings, a measure of labour demand, were down 384,000 to 9.59 million on the last day of March, the lowest level since April 2021. Data for February was revised higher to show 9.97 million job openings instead of the previously reported 9.93 million. Economists polled by Reuters had forecast 9.775 million job openings. They have dropped by 1.6 million since December. The decline in March was concentrated in small businesses, those with one to 49 employees, the main drivers of the labour market's phenomenal growth. There were 144,000 fewer vacancies in the transportation, warehousing and utilities industry. Professional and businesses services job openings declined by 135,000. Retailers reported a drop of 84,000 in vacancies. There were notable decreases in healthcare and social assistance, but educational services reported an additional 28,000 job openings. There were 34,000 government job openings. Vacancies fell in all four regions, with steep declines in the Midwest and West. The job openings rate fell to 5.8%, the lowest since March 2021, from 6.0% in February. Stocks on Wall Street were trading lower as investors focused on a warning by Treasury Secretary Janet Yellen that the federal government could run out of money within a month amid a standoff to raise its $31.4 trillion borrowing cap. The dollar fell against a basket of currencies. U.S. Treasury prices rose. Hiring was little changed at 6.1 million, keeping the hiring rate unchanged at 4.0%. Economists expected slowing demand for labour to be replicated in April's employment report, scheduled to be published on Friday. Nonfarm payrolls are expected to have increased by 179,000 jobs last month, the smallest gain since December 2020, after rising 236,000 in March, according to a Reuters survey of economists. The JOLTS report showed layoffs jumped by 248,000 to 1.8 million, the highest level since December 2020. The increase was led by the construction industry, which shed 112,000 positions. The decline likely reflected the job losses in the housing market, which has been hammered by higher mortgage rates.

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