The number of job openings across the country fell by more than half a million in February to the lowest level in nearly a year, punctuating a sharp slowdown in hiring that stoked worries about the labor market until a rebound in job creation a month later.
Job openings declined by 538,000 to 7.09 million in February, the Labor Department reported Tuesday. That’s the lowest level since March 2018.
In January, job openings had hit the second highest level ever.
What happened: February turned out to be a brutal month for hiring.
The U.S. added only 33,000 new jobs, the smallest increase in a year and a half. Economists blamed a severe cold spell, the residual effects of the government shutdown and other seasonal disruptions for the unusually small gain.
Hiring recovered in March as the U.S. added 196,000 new jobs, but it remains to be seen if job openings also increased during the month. They are reported with a one-month lag.
Job openings in February rose slightly in manufacturing, but they fell in every other industry.
Even after the big drop, there’s still almost 800,000 more open jobs available than the number of Americans officially classified as unemployed.
Meanwhile, a closely followed measure known as the quits rate — people who leave jobs on their own — was frozen at 2.3% for the ninth month in a row. It was also flat at 2.6% among private-sector employees.
More workers quit when they feel secure enough to leave one job for another, usually for better pay or more opportunity. The quits rate tends to rise when the economy is strong.
The current rate, for example, is the second highest since the government began keeping track in 2000. The quits rate bottomed out at 1.2% at the end of the 2007-2009 Great Recession.
Big picture: The rebound in hiring in March after February’s swoon was an encouraging sign that could point to somewhat faster growth in the economy in the months ahead. The U.S. has gotten off to a slow start in 2019.
With layoffs and unemployment near a half-century low, the labor market remains an oasis of strength for the economy despite lingering worries about a recession.
Still, the decline in job openings bears close watch. Further deterioration would be worrisome.
What they are saying?: “The drop in job openings in February is definitely something to keep an eye on, but it shouldn’t cause any panic yet,” said Nick Bunker, an economist at Indeed Hiring Lab who closely tracks job openings.
Market reaction: The Dow Jones Industrial Average
and S&P 500
fell in Tuesday trades. The Dow was held back again by Boeing
as the world’s largest airplane manufacturer struggles with the fallout from faulty software on its next-generation planes.
The 10-year Treasury yield
slipped to 2.49%. Yields are much lower compared to late last year, when they hit a seven-year high of 3.23%.