U.S. layoffs have hit their highest level in two years

U.S. job openings fell for a third straight month in March and layoffs increased to the highest level in more than two years, suggesting some softening in the labour market.

U.S. job openings fell for a third straight month in March and layoffs increased to the highest level in more than two years, suggesting some softening in the labour market that could aid the Federal Reserve’s fight against inflation.

Still, the labour market remains tight, with the monthly Job Openings and Labor Turnover Survey, or JOLTS report, from the Labor Department on Tuesday showing 1.6 vacancies for every unemployed person in March. That compared to 1.7 in February.

Fed officials, who started a two-day policy meeting on Tuesday, are closely watching this ratio. The U.S. central bank is expected to raise its benchmark overnight interest rate by another 25 basis points to the 5.00 per cent-5.25 per ent range on Wednesday before potentially pausing its fastest monetary policy tightening campaign since the 1980s.

“The decline in the ratio of job vacancies to unemployment in the last three months represents a reduction in the excess demand for labour that will be welcomed by the Fed,” said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.

“However, with the ratio still higher than at any time prior to November 2021, the labour market is still tight by historical standards.”

Job openings, a measure of labour demand, fell 384,000 to 9.59 million on the last day of March, the lowest level since April 2021, Data for February was revised higher to show 9.97 million job openings instead of the  previously reported 9.93 million. Economists polled by Reuters had forecast 9.775 million job openings.

Job openings have dropped by 1.6 million since December.

There were 144,000 fewer vacancies in the transportation, warehousing and utilities industry, but educational services reported an additional 28,000 job openings. The job openings rate fell to 5.8% from 6.0% in February.