WASHINGTON, March 8 (Reuters) – U.S. job openings fell less than expected in January and data for the previous month was revised upwards, indicating lingering labor market conditions that are likely to keep the Federal Reserve on track to raise interest rates for longer.
But the Department of Labor’s Monthly Job Openings and Turnover Survey, or JOLTS report, also hinted at cracks forming in the labor market on Wednesday. Layoffs hit a two-year high in January and job cuts were larger than initially thought in 2022. Fewer people voluntarily quit their jobs.
Nevertheless, the labor market remains vigorous, with 1.9 job creations per unemployed person in January, compared to 2.0 in December. Fed Chairman Jerome Powell told lawmakers on Tuesday that the U.S. central bank would likely need to raise rates more than expected and he opened the door to a half-percentage-point hike this month. to fight inflation after a recent string of strong economic data.
“The decline in job openings does not indicate any meaningful improvement in the balance between labor demand and supply from the Fed’s perspective,” said Conrad DeQuadros, senior economic adviser at Brean. Capital in New York. “If one wanted to hang on to straws, one could point to the second consecutive decline in the quit rate.”
Latest updates
See 2 more stories
Job postings, a measure of labor demand, fell by 410,000 to 10.8 million on the last day of January. December data has been revised up to show 11.2 million job openings instead of the 11.0 million previously reported. Economists polled by Reuters had forecast 10.5 million job openings.
The report also showed that job vacancies were mostly higher than initially estimated in 2022, averaging 11.2 million, an increase of 1.2 million from 2021. Openings occurred in all four regions, with steep declines in the Midwest and West, the epicenter. technological job cuts.
Construction, the biggest casualty of the Fed’s aggressive monetary policy tightening campaign, saw job vacancies fall by a record 240,000.
There were 204,000 fewer vacancies in accommodation and food services, while job vacancies fell by 100,000 in finance and insurance. Employment in the leisure and hospitality industry, which covers accommodation and food services, remains below its pre-pandemic level. This sector has been the main engine of employment growth.
Job vacancies also fell in durable goods manufacturing, retail, and state and local government. But job creation increased in transportation, warehousing and utilities as well as in the manufacturing of non-durable goods.
The job creation rate fell to a still high 6.5%, from 6.8% in December. It averaged 6.8% in 2022, compared to 6.4% in 2021.
Hirings reached 6.4 million against 6.3 million in December. The hiring rate rose to 4.1% from 4.0% in December. There were 77.2 million hires in 2022, a gain of 1.2 million from 2021. The hiring rate averaged 4.2% in December, compared to 4.3% in 2021 .
Layoffs jumped by 241,000 to 1.7 million, the highest level since December 2020, concentrated in professional and business services industries. Layoffs, however, have declined in the federal government. They have risen sharply in the South, which is experiencing a job boom.
Layoffs rose by 461,000 in 2022 to 17.6 million. The layoff rate fell to a still-low 1.1%, from 1.0% in December. While the rate remains below its pre-pandemic high of 1.3%, the level of layoffs is now closer to the average of 1.9 million before the onset of the COVID-19 public health crisis.
“This suggests that the period of unprecedented job security for American workers is coming to an end,” said Julia Pollak, chief economist at ZipRecruiter.
About 3.9 million people quit their jobs. This was the least since May 2021 and was down 207,000 from December. The decline was seen primarily in professional and business services, educational services and federal government. A record 50.6 million people quit smoking in 2022.
FEWER WORKERS LEAVING
Stocks on Wall Street were mixed. The dollar remained stable against a basket of currencies. US Treasury prices rose.
The quits rate, which is seen as a measure of labor market confidence, fell to 2.5% from 2.6% in December, still above its pre-pandemic norms of about 2 .3%.
“The recent movement in this measure, despite a drop this month, suggests that underlying wage pressure should remain elevated, even if the pressures ease somewhat,” said Marc Giannoni, chief US economist at Barclays in New York. “We continue to expect the pace of increase in wage employment to show a resilient labor market.”
Labor market strength was bolstered by the ADP’s National Employment Report, which showed private employment rose 242,000 jobs in February after rising 119,000 in January.
Job growth was robust in January, with the unemployment rate falling to an over-53½-year low of 3.4%.
Non-farm payrolls are expected to rise by 205,000 jobs in February after jumping by 517,000 in January, according to a Reuters survey of economists.
Data from Indeed showed job postings on the platform fell throughout February, which it said suggested there were 10.3 million openings at the end of the month. last.
“That would be another drop of about 500,000 opens,” said Nick Bunker, head of economic research at Indeed Hiring Lab. “Yet openings would still be 47% higher than they were before the pandemic. The job market is cooling, but it’s still hot.”
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci
Our standards: The Thomson Reuters Trust Principles.