Job Openings Decreased to 9.9 Million in February
The U.S. Bureau of Labor Statistics (BLS) recently released its February Job Openings and Labor Turnover Summary. The monthly report revealed 9.9 million job openings in February, compared with 10.6 million in January. The latest report shows a 632,000 decline from the previous month.
Available jobs remain historically high, but the reported drop in open positions signals that the labor market is slowing down. The number of job openings is viewed as an indication of the strength of the labor market and the broader economy. The Federal Reserve (Fed) wants labor demand to drop faster to reduce the upward pressure on wages contributing to high inflation. The largest decreases in job openings were in the professional and business services, health care and social assistance, and transportation, warehousing and utilities industries. In contrast, job openings increased in the construction and arts, entertainment and recreation sectors.
Total employee quits increased slightly from 3.9 million in January to 4 million in February. Because employee quits are generally voluntary separations initiated by the employee, the quit rate serves as a measure of workers’ willingness to or ability to leave jobs. February’s rate of employee quits was little changed at 2.6%. The number of employee quits fell in the finance and insurance sector.
Total separations dipped slightly to 5.8 million with a rate of 3.7%, down from 5.9 million (3.8% rate) in January. Furthermore, the number and rates of layoffs and discharges decreased to 1.5 million and remained at 1%, respectively. Layoffs decreased in professional and business services. Also, despite layoffs in the tech sector, layoffs overall have been historically low in recent months, which could mean employers are reluctant to part with workers.
Employer Takeaways
There were 1.7 jobs open for every unemployed worker in February, compared with 1.9 in January. This is a possible sign that the labor market is slowing down, but that it’s also healthy. Fed officials worry that a tight job market may contribute to inflation, pressuring employers to raise wages as they compete for talent.
Employers will likely continue to have difficulties attracting and retaining workers, resulting in increased labor costs as they raise wages and offer competitive benefits to attract talent. Employers should continue to monitor employment trends to stay competitive in today’s evolving market.
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