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Recent data shows the U.S. has the fewest job openings in nearly a year, signaling a cooling labor market, which raises concerns about potential impacts on Federal Reserve policy and market stability ahead of Friday's jobs report.
US job openings unexpectedly increased to 7.39 million in April, indicating a resilient labor demand despite economic uncertainties, with hiring rising and layoffs also climbing, suggesting a complex but stable job market.
Job openings in January dipped to their lowest level since March 2021, with 8.86 million open positions, while the quits rate, a measure of worker confidence, decreased to 2.1%. Despite this, the labor market is still considered strong, according to economists. Wage gains for job changers increased in February, indicating ongoing tightness in the labor market, but there are signs that wage growth may slow in the future, potentially impacting inflation. The February jobs report is expected to show a decrease in wage growth and the addition of 200,000 jobs to the US economy, with an unchanged unemployment rate of 3.7%.
Job openings in January dipped to their lowest level since March 2021, with 8.86 million open positions, while the quits rate decreased to 2.1%, signaling confidence among workers. The labor market is described as "still quite strong" by economists, and Federal Reserve Chair Jerome Powell noted that supply and demand conditions are improving. Wage gains for job changers increased in February, indicating ongoing tightness in the labor market, but there are signs pointing to potential wage deceleration in the future. Economists expect the February jobs report to show 200,000 jobs added and a 4.3% wage growth, down from 4.5% in January.
The latest JOLTS data for December showed job openings at 9.026 million, surpassing the 8.750 million estimate, with the quits rate remaining unchanged at 2.2%. Despite little change in layoffs and discharges, hires were also relatively stable. Total separations, including quits, layoffs, and discharges, remained at 5.4 million. The data, while near post-pandemic lows, exceeded expectations. US yields are trading near highs, with the 2-year yield at 4.346%, 5-year at 4.005%, 10-year at 4.083%, and 30-year at 4.306%.
The Bureau of Labor Statistics' Job Openings and Labor Turnover Survey (JOLTS) for November revealed significant disparities in job openings across industries. Construction is experiencing a boom with a 44% increase in job openings since 2019, reaching the highest number in the data set. In contrast, the information sector, which includes tech and social media companies, saw a 20% decline in job openings compared to 2019. Other sectors like professional and business services, manufacturing, and healthcare continue to have a tight labor market with job openings significantly higher than in 2019, while retail trade has seen a decrease. State and local government education sectors still show signs of teacher shortages, and wholesale trade has seen a slight increase in job openings.
The JOLTS report showed a drop in U.S. job openings to the lowest level since March 2021, indicating a cooling labor market. Wage growth has been slowing, particularly in the information sector. The ADP employment report revealed an increase of 103,000 private payrolls in November, aligning with the trend of a soft landing in the labor market. The November jobs report showed the addition of 199,000 jobs and a drop in the unemployment rate to 3.7%, signaling positive economic news and full employment. However, the Federal Reserve may not be entirely satisfied with the results.
US stocks surged after the Job Openings and Labor Turnover Survey (JOLTS) showed a decline in job openings, easing wage pressures and potentially giving the Federal Reserve more flexibility with interest rates. The Nasdaq 100 and S&P 500 had their best performing day in August, with technology stocks leading the charge. Investors are now awaiting the August jobs report, which is expected to show a slowdown in job gains and further alleviate pressure on interest rates.
The upcoming release of JOLTS and US consumer confidence data is anticipated, while a high-risk warning is issued for forex trading, emphasizing the need for careful consideration of investment objectives, experience level, and risk tolerance. FOREXLIVE™ provides educational services and references to economic and market information but does not endorse opinions or recommendations. Past performance is not indicative of future results, and caution is advised when reviewing claims made by advisors or system vendors. FOREXLIVE™ disclaims liability for any losses arising from reliance on provided information.
The Dow Jones Industrial Average fell 0.6% due to signs of a slowing economy after weak factory orders and JOLTS reports. AMC plunged over 20% after a settlement to convert its AMC Preferred Equity to common shares, which will dilute the value of AMC shares. Most sectors declined, but health and utilities notched small gains. Chipotle Mexican Grill is breaking out of a cup base, while C3.ai stock plunged over 20% on news reports of Kerrisdale Capital allegations of "serious accounting and disclosure issues." SpaceX rival Virgin Orbit filed for bankruptcy.
Job openings in the U.S. fell to 9.931 million in February, below the consensus estimate of 10.4 million, indicating a cooling job market. The job openings rate also declined from 6.4% to 6.0%. The largest decreases in job openings were in professional and business services, health care and social assistance, and transportation, warehousing, and utilities. However, the number of layoffs and discharges decreased to 1.504 million.