U.S. job openings fall to lowest level in more than 3 years

U.S. jobs openings slid in March to the lowest level in more than three years, but stayed at historically high levels in a sign that the job market remains resilient in the face of higher interest rates.

The Labor Department reported Wednesday that employers posted 8.5 million vacancies in March, down from 8.8 million in February and the fewest since February 2021.

The number of Americans quitting their jobs fell to the lowest level since January 2021—a sign of diminishing confidence in their ability to find something better. But layoffs fell.

Monthly job openings are down sharply from a peak of 12.2 million in March 2022 but remain at a high level. Before 2021, they’d never exceeded 8 million—a threshold they have now reached for 37 straight months.

The high level of job openings reflects a surprisingly strong U.S. labor market. When the Federal Reserve began raising interest rates in March 2022 to combat a resurgence in inflation, the higher borrowing costs were expected to tip the economy into recession and push up unemployment.

Instead, even as the Fed raised its benchmark rate 11 times, the economy kept growing, companies kept hiring and unemployment stayed low, coming in under 4% for 26 straight months—longest such streak since the 1960s. Employers have added a healthy average of 276,000 jobs a month this year—up from last year’s 251,000—and Friday’s April jobs report is expected to show they tacked on another 230,000 last month, down but still solid, according to a survey of forecasters by the data firm FactSet.

Inflation eased, too—decelerating from a four-decade high 9.1% in June 2022 to 3.5% in March. The combination of falling inflation and enduring economic strength has raised hopes the Fed can manage a so-called soft landing—slowing the economy enough to tame inflation without causing a recession. Some economists have suggested there need be no landing at all: The economy can keep growing steadily as inflation comes down.

But progress on inflation has lately stalled. On a month-to-month basis, consumer price increases haven’t fallen since October. And on a year-over-year basis, they remain well above the Fed’s 2% target.

The Fed had signaled that it expects to reverse course and cut rates three times this year. But, given the disappointing inflation numbers, the central bank appears to be in no hurry to start: It’s expected to leave rates alone at its meeting Wednesday.