The number of available jobs in the U.S. dropped sharply in February, the Bureau of Labor Statistics reported Tuesday, falling to 9.9 million from 10.5 million a month earlier. The results were well below analysts’ expectations and mark the first time job openings have fallen below 10 million since May 2021.
The decrease is a sign that the labor market continues to cool while remaining relatively healthy. Job openings peaked at 12 million in March 2022 and have been bouncing lower ever since, but the number of available jobs is still high relative to pre-pandemic standards; in February 2020, employers posted about 7 million open positions.
The number of jobs available per unemployed worker fell, as well, dropping to 1.67 in February, down from nearly 1.9 in January. Before the pandemic, there were 1.2 jobs per unemployed worker.
Good news for the Fed? The Federal Reserve is trying to slow the economy by raising interest rates, with the goal of reducing inflation by weakening the labor market and easing upward pressure on wages. Tuesday’s report provides more evidence that the Fed’s campaign is having its intended effect.
“We’re finally seeing companies cutting back their openings, which is the first step towards easing the tightness of the labor market,” Lightcast economist Ron Hetrick told The Wall Street Journal. “This could be what a soft landing looks like in today’s economy.”
Bloomberg economist Stuart Paul said the report “shows the labor market is unambiguously cooling, with labor demand moving more in line with supply. Most of the loosening has come via a decline in job openings, which should help alleviate Fed concerns of a potential wage-price spiral.”
Jeffrey Roach, chief economist at LPL Financial, told CNBC that the “labor market is starting to loosen as the number of job openings declined in most sectors. As the economy slows, firms will likely cut openings and workers will be less likely to quit in search of better hours and higher pay.” Roach added that the report could push the Fed toward pausing its interest rate increases, although that would likely require additional signs of softening in employment and inflation ahead of the next Fed meeting in May.
