By Lucia Mutikani
WASHINGTON (Reuters) -U.S. job openings edged up in February, though labor market conditions are gradually easing in support of expectations that the Federal Reserve will start cutting interest rates by June.
The Job Openings and Labor Turnover Survey, or JOLTS report, from the Labor Department on Tuesday showed there were 1.36 vacancies for every unemployed person in February, down from 1.43 in January. The decline in vacancy-to-unemployment ratio reflected a spike in unemployment at the start of the year.
Economists, however, argued that the drop in the ratio in February did not mark a material shift in the labor market.
“There is nothing here to worry Fed policymakers, who want a strong labor market, but the very slow progress in reducing the apparent excess demand for labor is not likely to encourage the FOMC to cut interest rates in the immediate future,” said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.
Job openings, a measure of labor demand, edged up 8,000 to 8.756 million on the last day of February, the Labor Department’s Bureau of Labor Statistics said. Data for January was revised lower to show 8.748 million unfilled positions instead of the previously reported 8.863 million.
Economists polled by Reuters had forecast 8.740 million job openings in February. Vacancies peaked at a record 12.0 million in March 2022.
Fed officials last month left the U.S. central bank’s policy rate unchanged in the current 5.25%-5.50% range, having raised it by 525 basis points since March 2022.
Policymakers anticipate three rate cuts this year. Financial markets expect the first rate reduction in June.
There were an additional 126,000 open positions in finance and insurance in February. Unfilled positions in state and local government, excluding education increased by 91,000, while arts, entertainment and recreation had 51,000 more job openings.
But vacancies in the information industry declined 85,000, while the federal government had 21,000 fewer open positions.
The job openings rate was unchanged at 5.3%.
Hiring increased 120,000 to 5.818 million. It was driven by retail trade, with 78,000 hires. There were also notable gains in transportation, warehousing and utilities. The hires rate rose to 3.7% from 3.6% in January.
“We view the openings data as indicative of demand for labor still being strong relative to supply but with there being less imbalance recently than there was a couple of years ago,” said Daniel Silver, an economist at JPMorgan in New York.
The number of workers resigning from their jobs, likely for greener pastures, increased 38,000 to 3.484 million in February.
About 77,000 retail workers quit their jobs, while resignations increased 42,000 in the professional and business services sector. But quits decreased 53,000 in accommodation and food services. The quits rate, viewed as a measure of labor market confidence, was unchanged at 2.2%.
Layoffs increased 128,000 to 1.724 million. Job cuts rose in the arts, entertainment and recreation industry as well as accommodation and food services. But they declined in professional and business services.
Low layoffs have accounted for most of the employment gains. The Labor Department is expected to report on Friday that nonfarm payrolls increased by 200,000 jobs in March. The economy added 275,000 jobs in February. The unemployment rate is forecast unchanged at 3.9% last month.
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