Overview
U.S. labor demand cooled slightly in March but the pace of hiring picked up substantially, signaling a mixed yet resilient labor market. The Bureau of Labor Statistics' Job Openings and Labor Turnover Survey found that job openings were down 56,000 to 6.866 million as of the last day of March. The job openings rate eased to 4.1% from 4.2% in February.
Hiring and separations
At the same time, employers increased their hiring activity sharply. Hires rose by 655,000 to 5.554 million, pushing the hires rate up to 3.5% from 3.1% in February. However, layoffs and discharges were also higher, increasing by 153,000 to 1.867 million, with that rate climbing to 1.2% from 1.1% in the prior month.
Market expectations and policy context
Financial market sentiment has been shaped by the relative stability in the labor market, underpinning expectations that the Federal Reserve will keep interest rates unchanged this year. The U.S. central bank last week left its benchmark overnight interest rate in the 3.50%-3.75% range, citing rising inflation concerns.
Geopolitical and commodity pressures
Economists highlighted growing downside risks to the labor market tied to geopolitical tensions. The U.S.-Israeli war with Iran has disrupted shipping through the Strait of Hormuz, a development that has pushed up the prices of oil, fertilizer, aluminum and other commodities. Those price moves represent a potential headwind for sectors exposed to energy, agriculture inputs and certain industrial metals.
What the data show
The March JOLTS snapshot presents a labor market with pockets of strength in hiring alongside rising separations and a small decline in vacancies. The interplay of stronger hiring and higher layoffs, combined with external pressures on commodity prices and the current stance of monetary policy, will be watched closely for signs of further shifts in labor demand.
Key takeaways
- Job openings fell by 56,000 to 6.866 million, with the openings rate at 4.1%.
- Hiring surged by 655,000 to 5.554 million; hires rate rose to 3.5%.
- Layoffs and discharges increased by 153,000 to 1.867 million, rate up to 1.2%.