By PAUL WISEMAN (AP Economics Writer)
WASHINGTON (AP) — US job openings did not change much in February, staying at very high levels, showing that the American job market is still strong.
The Labor Department said Tuesday that in February, employers had 8.76 million job vacancies, a small increase from 8.75 million in January, which was as predicted by economists.
However, the Job Openings and Labor Turnover Survey (JOLTS) indicated that layoffs rose to 1.7 million in February from 1.6 million in January, the highest since March 2023. The number of Americans quitting their jobs, a sign of their confidence in finding better pay or conditions elsewhere, increased slightly to 3.5 million.
Though monthly job openings dropped from a peak of 12.2 million in March 2022, they are still at a high level, having never exceeded 8 million before 2021.
The high number of job vacancies is a signal of the job market's strength and resilience. Most economists anticipated that when the Federal Reserve began raising its benchmark interest rates two years ago to tackle inflation, the higher borrowing costs would push the United States into a recession.
However, the economy has continued to grow, and employers have been looking for new workers while retaining those they already have. Despite the unemployment rate rising to 3.9% in February, it has been below 4% for 25 consecutive months, the longest streak since the 1960s.
Simultaneously, the higher rates have contributed to reducing inflation. In February, consumer prices were 3.2% higher than a year earlier, down from a peak of 9.1% in June 2022, the highest in four decades.
The combination of declining inflation and robust job growth has raised hopes that the Fed is achieving a “soft landing” by taming inflation without causing a recession. The Fed ceased raising rates in July and has indicated plans to decrease rates three times in 2024. However, it seems in no rush to do so, given the strength of the economy and inflation still being above the central bank's 2% target.
“Job openings are still high compared to pre-pandemic levels, indicating strong demand for workers,’’ said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “A strong labor market combined with receding but still above-target inflation supports the current patient approach of the Fed regarding future policy decisions.’’
Compared to layoffs, the gradual decrease in job openings is a painless way to cool down a labor market that has been very active, reducing upward pressure on wages that can lead to higher prices.
Hiring likely remained robust last month. Economists anticipate that the March jobs report, to be released Friday, will show employers added nearly 193,000 jobs and that unemployment dropped to 3.8%, according to a survey of forecasters by the data firm FactSet.
