Jobs Subside – JOLTS For February Marks Record Low
Before the most recent regional banking bust, the hot topic in the mind of both investors and the Federal Reserve was jobs. Despite last year’s hefty increases to the federal funds rate, the labor market shockingly proved to be resiliently robust to start the new year off. In January, the unemployment rate reached a 53-year low at 3.4%; although this is usually positive news, during times of high inflation this can be worrying as it is a direct indicator of strong economic growth which is correlated to inflation. In February, investors’ worries eased after the unemployment rate grew 20 basis points to 3.6%, however, the historically low numbers still remain first in the minds of the Federal Reserve.
To conclude the labor data for the month, the Job Openings and Labor Turnover Survey just released, continuing the trend of slowing job growth and potential disinflation. In February, job openings had declined to under 10 million for the first time since May 2021. The largest contributor to this decrease was the professional and business service sector, which lost roughly 280,000 job openings. Furthermore, after this most recent data, the job openings to available workers ratio is nearly 1.7 to 1. With news on the labor market seemingly pointing towards a pause in interest rate hikes, it is now left for the March CPI report to dissuade the Federal Reserve from increased fiscal tightening during their next meeting.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.