The number of available US jobs surged in April, complicating the Fed’s strategy
By Alicia Wallace, CNN
Minneapolis (CNN) — The number of available jobs in the United States unexpectedly rose in April, bucking economists’ predictions after a three-month stretch of declines.
Job openings climbed to 10.1 million in April from an upwardly revised 9.745 million the month before, according to labor turnover data released Wednesday by the Bureau of Labor Statistics.
Economists were expecting 9.375 million job openings, according to consensus estimates on Refinitiv.
The Federal Reserve wants to see more slack in the labor market, since an imbalance between worker demand and supply could cause wages to rise and, ultimately, add upward pressure to inflation (which the central bank is trying to tame with a series of 10 consecutive interest rate hikes).
As openings rose in April, so did the ratio of available jobs to Americans looking for work. That ticked up to 1.77, BLS data shows.
“While the Fed is still talking like it is on the inflation-righting warpath, the resilience and strength of the job market have been remarkable,” Mark Hamrick, senior economic analyst at Bankrate, wrote in a note on Wednesday. “It remains to be seen whether the Fed is prepared to pause or skip a rate hike at a forthcoming meeting. For officials to decide, there’s still [Friday’s] jobs report and the Consumer Price Index due before the June Fed meeting and announcement.”
The latest Job Openings and Labor Turnover Survey showed that hiring activity edged up to 6.12 million workers from 6.07 million, layoffs dropped to 1.58 million from 1.85 million and quits slipped down to 3.79 million from 3.84 million.
The number of people voluntarily leaving their jobs declined for the second consecutive month, indicating further moderation in workers’ willingness to test the labor market, said Matthew Martin, US economist at Oxford Economics. But with the layoffs and discharges rate down 0.2 percentage points, that shows businesses are still trying to hoard the workers they have been able to hire, he wrote Wednesday.
Job openings started skyrocketing in 2021 as America’s economy sought to fully recover from the deep job losses suffered the year before, at the pandemic’s onset. The number of available jobs set records and bounced around those heights for much of the past two years.
It wasn’t until the first quarter of this year when they declined in a meaningful — and fairly methodical — fashion.
JOLTS’ surprise to the upside signals that the loosening of the labor market likely won’t occur dramatically but rather occur on a bumpy path, Martin wrote.
“While there are some concerns over the veracity of the JOLTS survey due to historically low response rates, the upshot remains that labor market strength remains robust,” he wrote. “That will leave the Fed on pause through the end of the year as officials look to ensure a cooling in jobs demand.”
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