Is The U.S. Labor Market Finally Stable?

The Labor Bureau’s April 2024 JOLTS Report shows job openings fell to their lowest level since February 2021 — dropping to 8.1 million in April.  

Indeed’s Hiring Lab reports the dramatic decline brings the labor market closer to its pre-pandemic balance. Economists now estimate that for every job seeker there are 1.2 available jobs.  

The estimated ratio mirrors pre-pandemic job market conditions. CNN Business reports that it’s the lowest ratio since June 2021. 

Over two-thirds of the decline in job openings comes from the healthcare and social assistance sectors — a decrease of 204,000 job openings. This sharp drop raises questions about sector-specific challenges and whether this decline might slightly overstate the broader labor market’s cooling trend. 

Other industries including leisure and hospitality, as well as state and local government, also witnessed considerable reductions in job openings, indicating a more widespread trend. 

Despite fewer job vacancies, the April report shows hiring and quitting rates hold steady. Hiring Lab reports that the hiring rate has hovered around 3.6% since November of the previous year, and the quits rate has maintained a steady 2.2% over the past four months.  

The layoff rate remains at its lowest level since December 2022, at approximately 1%. 

The updated data shows that while the labor market has cooled, it has not taken a downturn as severe as some might have feared.  

Persistent declines in job openings could challenge the steadiness of hiring rates and potentially lead to higher unemployment. The Federal Reserve, in its upcoming Federal Open Markets Committee meeting on June 11-12, will likely consider these labor market conditions closely.