In February, job openings in the United States fell below 10 million for the first time in almost two years, indicating that the Federal Reserve's efforts to slow down the labor market may be working. According to the Labor Department's monthly Job Openings and Labor Turnover Survey, available positions totaled 9.93 million, down 632,000 from the downwardly revised number in January. Wall Street had been anticipating 10.4 million job openings.
The Fed has been targeting the overheated labor market in its efforts to bring down inflation, which had reached a 41-year high in the summer of 2022. Despite the central bank's nine benchmark interest rate hikes since March 2022, those moves had previously appeared to have little effect on the job situation.
Prior to the February data, job openings had outnumbered available workers by almost 2 to 1. The latest figures have reduced that ratio to less than 1.7 to 1. Following the release of the data, Treasury yields fell as it could discourage the Fed from implementing further rate hikes, while stocks fell.
As per Jeffrey Roach, chief economist at LPL Financial, "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. The Fed could consider pausing rate hikes at the next meeting, but only if the upcoming employment report shows signs of material weakness and the March [consumer price index] report reveals lower inflation."
Comments