U.S. job openings fell to the lowest level since 2021 in April.
But they remained at historically high levels despite rising interest rates and signs of a slowing economy.
The Labor Department reported Tuesday that employers posted 8.1 million job openings in April, down from a revised 8.4 million in March.
The March figure was initially 8.5 million.
Still, layoffs have fallen and the number of Americans quitting their jobs, a sign of confidence in the future, rose in April.
Monthly job openings have fallen steadily from a peak of 12.2 million in March 2022 as companies desperately seek workers as the economy recovers from COVID-19 lockdowns, but they remain high.
Prior to 2021, it had never topped 8 million, but it has now reached that figure for 38 consecutive months.
The high number of job openings reflects a surprisingly robust labor market.
When the Federal Reserve began raising interest rates in March 2022 to combat a resurgence in inflation, rising borrowing costs were expected to push the economy into recession and cause unemployment to rise.
Instead, the economy continued to grow and employers continued to hire.
The United States added an average of 234,000 new jobs per month last year.
The Labor Department is expected to report on Friday that employers added another 180,000 jobs, according to a survey of forecasts by data firm FactSet.
The unemployment rate is expected to be 3.9%, marking the 28th consecutive month that it has remained below 4%.
This will be the longest such period since the 35 months from 1951 to 1953 during the Korean War.
Still, high interest rates are taking a toll.
The economy grew at an annualized rate of just 1.3% in the January-March period, the weakest since spring 2022.
Much of the first-quarter slowdown was caused by volatile factors such as a surge in imports and a decline in business inventories.
Consumer spending, which accounts for 70% of U.S. economic activity, continued to grow but at an annualized rate of 2%, down from 3.3% in the final three months of 2023.
It was expected that lower interest rates would help the economy.
The Federal Reserve has signaled it plans to cut interest rates three times this year.
However, the start of rate cuts continues to be postponed as inflation remains above the central bank’s 2% target.
According to the CME FedWatch tool, Wall Street investors currently expect the first rate cut to not come until the Fed’s September meeting.
Federal Reserve policymakers are likely to welcome a drop in job openings as a relatively painless way to cool a red-hot labor market and ease pressure on companies to raise wages, which could fuel inflation.
“Overall, job openings remain high, signaling strong demand for workers,” said Rubeela Farooqui, chief U.S. economist at High Frequency Economics. “However, job openings continue to move in the right direction toward pre-pandemic levels, signaling a normalization of labor supply and demand.”
