US job openings fell in February while layoffs remained subdued, adding to evidence of a labor market that’s only gradually cooling.
The number of available positions decreased to 7.57 million from a revised 7.76 million reading in January, the Bureau of Labor Statistics Job Openings and Labor Turnover Survey, known as JOLTS, showed Tuesday. The median estimate in a Bloomberg survey of economists called for 7.66 million openings.
The pullback in openings was driven by declines in retail trade, financial activities and accommodation and food services.
After steadily declining from a peak in 2022, job openings have largely stabilized around pre-pandemic levels. However, the uncertainty around President Donald Trump’s policies is putting business investment plans on hold, which also risks damping the job market and economic growth overall.
Federal Reserve Chair Jerome Powell has characterized the job market as a “low firing, low hiring situation” that’s held for several months. That’s what economists expect out of Friday’s jobs report, which is forecast to show hiring continued to moderate last month and the unemployment rate held at 4.1%.
In the JOLTS report, the hiring rate was unchanged at 3.4% in February, near the lowest since the onset of the pandemic.
While the layoff rate remained in line with pre-pandemic levels, job-cut announcements have been mounting in recent months, driven by thousands of planned reductions in the federal government. A tally of March announcements is due Thursday.
Consumers have been more downbeat about their job prospects and financial situations in recent sentiment surveys, which has businesses including Walmart Inc. and American Airlines Group Inc. warning of weaker demand ahead. To the extent that translates into a marked pullback in spending, companies’ hiring plans could take a hit as well.
The so-called quits rate, which measures the percentage of people voluntarily leaving their jobs each month, was unchanged at 2%, down from a high of 3% in 2022. Many workers have been clinging to their jobs amid growing pessimism about the economic outlook. And while changing positions used to come with a big pay bump, those gains are now mostly gone.
The number of vacancies per unemployed worker, a ratio the Fed watches closely as a proxy of the balance between labor demand and supply, remained at 1.1. At its peak in 2022, the ratio was 2 to 1.
Some economists have questioned the validity of the JOLTS data, in part due to the survey’s low response rate and heavy revisions. A similar index by job-posting site Indeed, which is reported on a daily basis, showed openings declined in February, and they were the lowest in four years as of Friday.
A separate report Tuesday showed US factory activity contracted in March for the first time this year and prices accelerated sharply, as the drumbeat of higher tariffs reverberated through the economy.
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