Hiring, Firing, And Quitting All Fell In March

The labor market may be hot by historical standards, but it’s getting colder for job seekers, who saw the pickings in “help wanted” ads get slimmer, while fewer people were hired, fired, or switched jobs. 

There were 8.5 million job openings that month, down from 8.8 million in February, and the fewest since February 2021, the Bureau of Labor Statistics said Wednesday. That was less than the 8.7 million forecasters had expected according to a survey of economists by Dow Jones Newswires and the Wall Street Journal. It meant there were 1.3 job openings per unemployed worker, slightly above the ratio of 1.2 that was typical just ahead of the pandemic. 

The labor market surged after the economy reopened from the pandemic, peaking in March 2022 when there were more than 12 million job openings, two for every unemployed worker. Job openings have been on a downward trend since then, though employers have continued adding jobs steadily and have avoided mass layoffs. The layoff rate fell to 1% in March from 1.1% in February, sticking close to a historic low. 

Fewer people voluntarily left their jobs too, with the quit rate falling to 2.1% from 2.2%, hitting its lowest point since August 2020. The number of hires fell to 5.5 million, the fewest since April 2020 in the depths of the pandemic’s first onslaught. 

Job Market Could Be ‘Locked-In’

Overall, the report painted a picture of a labor market where more people are increasingly stuck in place, with hiring, firing, and quitting all declining.

“Low hires, quits and layoffs are an unusual combination that points to a certain ‘lock-in’ in the job market,” Daniel Zhao, lead economist at job site Glassdoor, posted on social media platform X.

If the labor market is seeing a “lock-in” effect set in, it would echo the state of the housing market, where moving has become more difficult because of high mortgage rates and the reluctance of homeowners to put houses up for sale. The market for both houses and jobs is more stable than usual, with less movement for better or for worse. 

Reduced job openings could signal an impending slowdown in a hot labor market where wages and benefits faster than usual. While that trend benefits household finances, it’s concerning to officials at the Federal Reserve who are attempting to corral inflation and have worried that pay raises are fueling price increases for all kinds of consumer goods and services. 

Fed officials have cited rapid job and wage growth as a reason they’ve been in no hurry to cut the central bank’s benchmark interest rate, which they’ve held at a 23-year high in an effort to subdue inflation.