By PAUL WISEMAN (AP Economics Writer)
WASHINGTON (AP) — Job vacancies in the US stayed at very high levels in February, showing that the job market in the US is still strong.
The Labor Department said on Tuesday that there were 8.76 million job openings in February, slightly more than 8.75 million in January, which was what economists had expected.
However, the Job Openings and Labor Turnover Survey, or JOLTS, showed that layoffs increased to 1.7 million in February from 1.6 million in January, which is the highest since March 2023. The number of Americans leaving their jobs, which shows they are confident they can find better pay or working conditions elsewhere, rose slightly to 3.5 million.
The monthly job openings decreased from a peak of 12.2 million in March 2022 but are still at a high level. Before 2021, they had never exceeded 8 million.
The high level of job vacancies shows the strength and endurance of the job market. When the Federal Reserve started raising its benchmark interest rates two years ago to counter inflation, most economists thought the higher borrowing costs would push the US into a recession.
However, the economy has continued to grow, and employers have been looking for new workers and retaining the ones they have. Although the unemployment rate rose to 3.9% in February, it has remained below 4% for 25 consecutive months, the longest such period since the 1960s.
At the same time, the higher rates have reduced inflation. In February, consumer prices were 3.2% higher than a year earlier, down from a peak of 9.1% in June 2022, which was the highest in four decades.
The combination of decreasing inflation and strong job growth has raised hopes that the Fed is successfully controlling inflation without causing a recession. The Fed stopped raising rates last July and has indicated that it plans to reverse course and cut rates three times in 2024. However, it seems to be in no hurry to do so, given the strength of the economy and with inflation still above the central bank's 2% target.
Rubeela Farooqi, chief US economist at High Frequency Economics, said, “Job openings are still high compared to before the pandemic, indicating strong demand for workers. A strong labor market and decreasing but still above-target inflation support the Fed's current patient approach to future policy decisions.
Compared to layoffs, the gradual decrease in job openings is a painless way to cool down a job market that has been very active, easing the upward pressure on wages that can lead to higher prices.
It is likely that hiring remained strong last month. Economists expect the March jobs report, to be released on Friday, to show that employers added nearly 193,000 jobs and that the unemployment rate dropped to 3.8%, based on a survey of forecasters by the data firm FactSet.
