The number of job openings in the United States increased by very slightly to 8.76 million in February, a sign that the labor market still has underlying strength despite higher interest rates that have weighed on some sectors.
The new numbers, including openings across all sectors for that month, were released as part of the Job Openings and Labor Turnover Survey, which was updated by the Bureau of Labor Statistics on Tuesday.
The latest numbers show that even with the Federal Reserve having raised rates to multiyear highs, the labor market is holding up. It could give the Fed some ammunition to keep its interest rate target higher for longer.
About 3.5 million workers quit their jobs in February, little changed from the month before. The figure is equivalent to about 2.2% of the workforce.
The “quits rate” measures the number of people who voluntarily left their jobs and includes those who left their previous employment for another job and people who quit but are confident they will soon find new employment. A higher quits rate is usually interpreted as a sign of economic strength, as it suggests workers are optimistic about their prospects.
Also of note in Tuesday’s JOLTS report: Layoffs and discharges were little changed at 1.7 million in February.
“The job market has remained surprisingly resilient and robust despite two years of tight monetary policy,” said Mark Hamrick, senior economic analyst at Bankrate. “In the forthcoming report, about 200,000 jobs are expected to have been added in March with the unemployment rate continuing its more than two-year-long run below 4%. This is the longest streak since the late 1960s.”
The labor market has remained strong despite the Fed’s rate hikes, which began in earnest in March 2022.
The economy beat expectations again in February and added another 275,000 jobs, the Bureau of Labor Statistics reported earlier last month. The unemployment rate was at 3.9%, a low level by historical standards. The next jobs report for March is coming on Friday, and economists once again expect it to show job growth of over 200,000.
Because of the recent progress in bringing down inflation, the Fed is eying a pivot to cutting interest rates. The central bank has held its interest rate target steady since July but now appears on the verge of cutting. A major question is when it will begin to do so.
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It appears very unlikely that the Fed will finally start cutting interest rates at its meeting next week, though there is a small chance.
Investors are implying a probability of over 61% that the Fed will end up cutting interest rates by the time its June meeting has concluded, according to the CME Group’s FedWatch tool, which calculates the probability using futures contract prices for rates in the short-term market targeted by the Fed.