United States job openings edged lower in March, while a sharp increase in hiring signalled improving momentum in the labour market after a period of weakness last year.
According to the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), vacancies fell by 56,000 to 6.866 million at the end of March, slightly above expectations of 6.84 million.
The job openings rate eased to 4.1% from 4.2% in February.
Despite the decline in vacancies, hiring rose significantly, climbing by 655,000 to 5.554 million. The hires rate increased to 3.5% from 3.1% in the previous month, indicating stronger employer demand for workers.
Layoffs and discharges also increased, rising by 153,000 to 1.867 million, with the rate ticking up to 1.2% from 1.1%, suggesting some pockets of softness remain within the labour market.
However, downside risks are building, particularly from geopolitical tensions stemming from the U.S.-Israeli conflict with Iran.
The disruption to shipping through the Strait of Hormuz has driven up prices for key commodities, including oil, fertiliser and aluminium, potentially weighing on broader economic activity.
For now, labour market resilience is reinforcing expectations that the Federal Reserve will maintain its current policy stance.
The U.S. central bank last week left its benchmark interest rate unchanged within a range of 3.50% to 3.75%, citing ongoing inflation concerns.
Separately, activity in the U.S. services sector showed signs of moderating in April. The Institute for Supply Management’s Services Purchasing Managers’ Index (PMI) slipped to 53.6 from 54.0 in March, coming in slightly below market expectations of 53.7, but remaining in expansion territory.
Commenting on the report, Steve Miller, Chair of the ISM Services Business Survey Committee, said: “In April, the Services PMI registered 53.6 per cent, a decrease of 0.4 percentage point compared to March’s figure of 54 percent.
"The Business Activity Index remained in expansion territory in April, increasing 2 percentage points to 55.9 per cent from March’s reading of 53.9 per cent.
"The New Orders Index registered 53.5 per cent, 7.1 percentage points below March’s figure of 60.6 per cent and 0.4 percentage point below its 12-month average reading of 53.9 per cent.
"The Employment Index contracted for the second month in a row with a reading of 48 per cent, a 2.8-percentage point increase from the 45.2 per cent recorded in March.”
Further details from the survey showed the Prices Paid Index, a key gauge of inflation, held steady at 70.7.
