WASHINGTON — U.S. job openings fell in April to their lowest level since 2021. But they remained at historically strong levels despite high interest rates and signs the economy is slowing.
The Department of Labor reported Tuesday that employers posted 8.1 million job openings in April, up from a revised 8.4 million in March. The figures for March originally stood at 8.5 million.
Still, layoffs fell and the number of Americans leaving their jobs – a sign of confidence in their prospects – rose in April.
Monthly job openings have fallen steadily to a peak of 12.2 million in March 2022 – as the economy's recovery from COVID-19 lockdowns left companies desperate for workers – but they remain at high levels . Before 2021, they never reached the 8 million mark – a threshold they have now reached for 38 consecutive months.
The high number of job openings reflects a surprisingly strong U.S. labor market. When the Federal Reserve began raising interest rates in March 2022 to combat an uptick in inflation, it was expected that the higher borrowing costs would push the economy into recession and raise unemployment.
Instead, the economy continued to grow and employers continued to hire. The United States has created an average of 234,000 new jobs per month over the past year. On Friday, the Department of Labor is expected to report that employers have added another 180,000 jobs, according to a survey of forecasters by data firm FactSet.
The unemployment rate is expected to reach 3.9%, which would be the 28th month in a row that it has been below 4%. That would be the longest streak since a 35-month period from 1951 to 1953 during the Korean War.
Still, the high rates are taking their toll. The economy grew at just an annual rate of 1.3% from January through March, the slowest since spring 2022. Much of the slowdown in the first quarter was driven by volatile factors, such as a surge in imports and a decrease in company inventories. Consumer spending, which represents 70% of US economic activity, continued to grow, but at a slower annual rate – 2%, down from 3.3% in the last three months of 2023.
The economy was expected to get a boost from lower interest rates. The Fed announced that it plans to cut interest rates three times this year. But the start of austerity continues to be delayed as inflation remains stubbornly above the central bank's 2% target.
Now Wall Street investors don't expect the first rate cut until the Fed's September meeting, according to CME's FedWatch tool.
Fed policymakers likely welcome lower job openings — a relatively painless way to cool a hot labor market and reduce pressure on companies to raise wages, which can fuel inflation.
“Overall, job openings remain high, indicating strong demand for workers,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “But they continue to move in the right direction, toward pre-pandemic measurements, indicating continued normalization between labor supply and demand.”
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AP Economics writer Christopher Rugaber contributed to this story.
