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June 4, 2024 – 8:06 AM PDT
(Reuters) – U.S. job openings fell more than expected in April to the lowest in more than three years, a sign that labor market conditions are softening in a manner that could help the Federal Reserve’s fight against inflation.
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Job openings, a measure of labor demand, were down 296,000 to 8.059 million on the last day of April, the lowest level since February 2021, the Labor Department’s Bureau of Labor Statistics said on Tuesday in its Job Openings and Labor Turnover Survey, or JOLTS report.
There were 1.24 job openings in April for every job-seeker, the data showed. That was down from 1.3 in March and the lowest since June 2021, but matched the high-water mark of pre-pandemic times.
Fed Chair Jerome Powell has often cited this ratio, which peaked near two job openings for every unemployed person, as a measure of labor market slack.
The decline points to “an ongoing normalization between supply and demand for labor,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “From a policy perspective, the Fed’s challenge will be to maintain rates at a level that not only helps keep inflation in check but also prevents a significant weakening in the labor market going forward.”
Data for March was revised slightly lower to show 8.355 million unfilled positions instead of the previously reported 8.488 million. Economists polled by Reuters had forecast 8.355 million job openings in April. Vacancies peaked at a record 12.0 million in March 2022.
The number of people quitting their jobs rose 98,000 to 3.507 million in April. The quits rate was unchanged from a month earlier at 2.2%, the lowest since September 2020.
Federal Reserve officials next week are expected to leave the U.S. central bank’s policy rate in the same 5.25%-5.50% range where it has been since last July. They have said a rate cut will likely wait until data shows inflation, after a stronger-than-expected run during the first quarter, is headed back down toward their 2% goal.
Fed officials have said that only an unexpected and meaningful weakening of the labor market could trigger a rate cut sooner than otherwise.
They have so far welcomed evidence of labor market cooling as a sign of a rebalancing that eases upward pressure on prices.
Financial markets are pricing in a first Fed rate cut in September, and a second one in December.
A separate report out Tuesday showed orders for U.S.-manufactured goods increased for a third straight month in April, boosted by demand for transportation equipment.
Reporting by Ann Saphir, Dan Burns and Howard Schneider; Editing by Chizu Nomiyama and Andrea Ricci