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The number of job openings declined to roughly 9.9 million nationwide in February, the Labor Department reported Tuesday. That’s the lowest reported number of available positions since May 2021, demonstrating that the labor market may be slackening. But there are still other signs, such as decreased layoffs and higher quit rates, that point to strong labor demand.
The number of openings in February was at 9.931 million, compared with 10.563 million openings in January, according to the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey, or JOLTS. That’s well below the peak of 12 million openings in March 2021. The rate of job openings declined 0.4 percentage points from January (6.4%) to February (6%).
The JOLTS report is one of the labor market indicators the Federal Reserve keeps an eye on. The Fed has raised interest rates nine times since March 2022 in its efforts to cool down the economy, which in theory could potentially lead to layoffs and a higher unemployment rate. Both of those effects would cool down the labor market. So far, that hasn’t happened.
Professional and business services see the greatest declines
According to the JOLTS report, the largest decreases in the number of job openings from January to February were in:
Professional and business services: -278,000.
Health care and social assistance: -150,000.
Transportation, warehousing and utilities: -145,000.
The number of job openings increased in construction (+129,000) and in arts, entertainment and recreation (+38,000).
There was little change to new hires across all industries, though the federal government saw a small boost (+8,000).
Quits are up, and layoffs are down
A few signals in the JOLTS report show the labor market isn’t cooling that quickly. In February compared with January, there was little change to the number of total separations, at 5.8 million, or the rate of 3.7%. Total separations include quits, layoffs and discharges as well as all other separations due to retirement, death, disability or transfers.
In February, the number of quits, specifically, increased to 4 million from 3.9 million in January, and the rate of 2.6% was little changed from the previous month. Quit rates are an indicator that employees feel comfortable switching jobs. Quits increased most significantly in professional and business services and decreased most significantly in finance and insurance.
The number of layoffs and discharges decreased to 1.5 million in February from 1.7 million in January, and the rate of 1% changed little from the previous month. Layoffs decreased most in professional and business services.
Layoffs have primarily been centered in the tech sector. The latest layoffs are set to hit corporate retail employees at Apple, Bloomberg reported Monday. A total of 554 tech companies have laid off employees in 2023 as of Tuesday morning, according to layoffs.fyi, which tracks layoffs in the tech industry.
There are signs that layoffs are hitting other corporate sectors, too. The Wall Street Journal cited an internal email at fast-food giant McDonald’s, which told its corporate staff it was preparing to announce layoffs this week. Meanwhile, Walt Disney Co. began its planned layoffs of 7,000 employees last week.
