Signs of Softening in the Labor Market

Signs of Softening in the Labor Market

REUTERS/Lucy Nicholson

The number of job openings in the U.S. fell to 9.59 million at the end of March, declining from an upwardly revised total of 9.97 million in February, the Bureau of Labor Statistics announced Monday.

The latest “Job Openings and Labor Turnover Summary” report, knowns as JOLTS, provides more evidence that the labor market is softening. The number of job openings has declined for three months in a row and is now well below the 12 million mark recorded last spring. The ratio of open jobs to the number of unemployed people fell to 1.65, meaning there were 1.65 jobs available for every unemployed worker in March. That’s above the pre-pandemic average of about 1.2 jobs per unemployed worker, but below the peak level of 2 that was reached in March 2022.

The number of quits fell, too, dropping by 129,000 to 3.85 million. Economists consider the number of quits to be a good measure of worker confidence, and the measure has now fallen to its lowest reading since May 2021, suggesting that workers aren’t finding as many attractive alternative employment options as they were last year.

The number of layoffs and discharges, on the other hand, rose in March, climbing to 1.8 million. That’s significantly above the cyclical low of 1.3 million recorded in 2021, and close to the pre-pandemic average of about 1.9 million.

“Demand for labor is cooling, and the dynamics of the labor market are normalizing,” Julia Pollak, chief economist at ZipRecruiter, told CNN. “After two years of incredibly rapid churn and highly elevated demand, things are now all going back to normal levels and rates.”