US job openings slipped in March amid a decline in professional and business services, but a surge in hiring to a more than two-year high suggested the labour market was regaining its footing after struggling in recent months.
The largest increase in hires since the spring of 2020 followed a plunge in February. Economists said the US-Israeli war with Iran posed a downside risk to the labour market. Still, the report from the Labour Department yesterday reinforced their expectations that the Federal Reserve would leave interest rates unchanged into 2027. The job openings to unemployed ratio was at 0.95 in March.
“Today’s reading will be a reassuring sign for the FOMC (Federal Open Market Committee) that labour demand remained stable into the early stages of the Iran conflict, providing little cause for easing on risk management grounds,” said Marc Giannoni, chief US economist at Barclays.
Job openings, a measure of labour demand, were down 56,000 to 6.866 million by the last day of March, the Labour Department’s Bureau of Labour Statistics said in its Job Openings and Labour Turnover Survey, or JOLTS report. Economists polled by Reuters had forecast 6.835 million unfilled jobs.
Vacancies decreased by 318,000 in professional and business services. There were more job openings in retail, financial activities, healthcare and social assistance sectors.
The job openings rate eased to 4.1 per cent from 4.2pc in February.
Hiring jumped by 655,000 to 5.554m, the highest level since February 2024. The increase was the largest since May 2020. It spread across retail, transportation, warehousing and utilities, as well as professional and business services, and leisure and hospitality industries. The hires rate increased to 3.5pc, the highest level since May 2024, from 3.1pc in February.
The conflict with Iran has disrupted shipping through the Strait of Hormuz, raising the prices of commodities ranging from oil to fertilisers and aluminium. Layoffs and discharges increased by 153,000 to 1.867m, with the rate for that category climbing to 1.2pc from 1.1pc in the prior month.
The professional and business services sector accounted for the bulk of the layoffs. Economists expected the closely watched employment report for April to echo the stable labour market theme. The US central bank last week left its benchmark overnight interest rate in the 3.50pc-3.75pc range, citing rising inflation concerns.
Stocks on Wall Street traded higher. The dollar was steady against a basket of currencies. US Treasury yields dipped.
Inflation concerns were underscored by a separate report from the Institute for Supply Management, which showed a measure of prices paid for inputs by services businesses held near a 3-1/2-year high in April. Prices increased further for aluminium, beef, copper, diesel, petrol, labour and lumber among others.
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