Job openings fell more than expected in April, indicating potential weakness in the labor market that could provide the Federal Reserve with more momentum to start cutting interest rates.
The Labor Department's Job Opportunity and Labor Turnover Survey showed that the level of job vacancies fell to 8.06 million during the month, down about 300,000 from March and about 19% lower than last year.
Moreover, the total hit the lowest level since February 2021. The ratio of openings to available workers fell from 1.2 to 1, after it was about 2 to 1 when openings peaked above 12 million in March 2022. The ratio is back to about where it was. It was before the Covid pandemic.
Fed officials are watching the JOLTS report closely for signs of labor market stagnation as they look for the direction of monetary policy. Policymakers have kept benchmark interest rates at their highest levels in 23 years awaiting more convincing evidence that inflation is progressing back to the central bank's 2% target. Market prices point to an initial rate cut in September.
While job openings declined, employment rates rose slightly as did separations and resignations, a sign of workers' confidence in the ability to move on to other jobs.
By industry, IT saw the largest decline in open rates, down 1.3% during the month. Two industries that were the biggest job gainers, health care and leisure and hospitality, saw notable declines in employment, down 0.8% and 0.6%, respectively.
The report from the Bureau of Labor Statistics kicks off a big week of work-related data.
On Wednesday, ADP will release its May estimates for private sector payrolls, with the Dow Jones estimate at 175,000 for May, down from 192,000 in April. Weekly unemployment claims data will be released on Thursday. Then on Friday, the BLS will release the May nonfarm payrolls report, which is expected to show growth of 190,000, after 175,000 the previous month.
