US Job Openings Rise by the Most Since 2021; Hiring Weak Amid Economic Uncertainty

 

• U.S. job openings increased by the most in five years in April, but the surge likely overstates the labour market's health, as hiring declined against the backdrop of economic uncertainty stemming from the Iran war. The Job Openings and Labour Turnover Survey (JOLTS) from the Labour Department on Tuesday also showed resignations dropped to the lowest level in nearly six years in April, a sign of a lack of confidence in the jobs market.
• The professional and business services industry accounted for roughly 91% of the jump in job openings in April. Economists said the labour market had not shifted from its “slow-hire, slow-fire” mode, warning of downside risks from the three-month U.S.-backed war with Iran, which has caused shortages and boosted the prices of commodities, including energy products and aluminium.
• Job openings, a measure of labour demand, surged by 731,000 to 7.618 million by the last day of April, the highest level since May 2024, the Labour Department's Bureau of Labour Statistics said. Economists polled by Reuters had forecast 6.88 million unfilled jobs. Professional and business services openings jumped by 668,000, which some economists said was an anomaly, while health care and social assistance added 89,000 positions. Job openings in the finance sector decreased by 134,000. The job openings rate jumped to 4.6% from 4.2% in March.
• Hires dropped 419,000 to 5.116 million in April, suggesting the solid increase in nonfarm payrolls that month was mostly due to lower layoffs. The nearly broad-based decline was led by a decrease of 131,000 in professional and business services, with retail trade hires falling by 81,000. The hiring rate fell to 3.2% from 3.5% in March. The U.S. employment report for May, due Friday, is expected to show nonfarm payrolls increased by 85,000 jobs after two months of gains in excess of 100,000, with the unemployment rate holding steady at 4.3%.
• With hiring weak, fewer workers are job-hopping. Resignations in April dropped by 183,000 to 2.977 million, the lowest level since August 2020, and the quits rate slipped to 1.9% from 2.0% in March. The lower quits rate suggests wage inflation is not an issue for the Federal Reserve as it confronts rising price pressures due to the Middle East conflict. Financial markets expect the central bank will keep its benchmark overnight interest rate in the 3.50%-3.75% range into 2027.
• Though employers are not boosting headcount, they are not engaging in mass layoffs, anchoring the labour market. Layoffs and discharges dropped by 192,000 to 1.692 million in April, with fewer layoffs in professional and business services, retail trade and construction, though they increased in accommodation and food services. The layoff rate fell to 1.1% from 1.2% in the prior month.

(Source: Reuters)