For the first time in close to two years, the number of open positions fell below 10 million in February.

For the first time in close to two years, the number of job vacancies dropped below 10 million in February, suggesting that the Federal Reserve’s attempts to slow the labor market may be having some effect.

According to the Labor Department’s monthly Job Openings and Labor Turnover Survey released on Tuesday, there were 9.93 million open positions, a decrease of 632,000 from January’s upwardly revised figure. According to FactSet, Wall Street had been searching for 10.4 million.

Since May 2021, the number of vacancies had not been below 10 million.

The Fed has set its sights on the booming labor market in its effort to lower inflation, which peaked in the summer of 2022 at a level not seen in 41 years. Since March 2022, the central bank has increased the benchmark interest rate nine times, but those changes didn’t seem to have much of an effect on the employment situation.

Prior to the February report, the ratio of available workers to job opportunities had been close to two to one. According to the most recent data, that ratio is now less than 1.7 to 1.

Following the announcement, Treasury yields decreased as a result of the data’s potential to prevent the Fed from raising rates further. Stocks decreased.

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“As job opportunities fell across most industries, the labor market is beginning to relax. According to Jeffrey Roach, chief economist at LPL Financial, if the economy weakens, businesses are likely to reduce opportunities and employees are less likely to leave their jobs in quest of better hours and income. At the following meeting, the Fed “could consider pausing rate hikes, but only if the March [consumer price index] report reveals lower inflation and the upcoming employment report shows signs of material weakness.”

The JOLTS figures are actively monitored by the Fed for indications of labor slack even though the numbers are a month behind.

The number of hires and separations also marginally reduced along with the decline in job openings. The number of resignations—a reflection of workers’ confidence in their capacity to change jobs—rose by 146,000 to slightly over 4 million.

Professional and business services witnessed a decline of 278,000 job opportunities in the month, while trade, transportation, and utilities decreased by 210,000. The sector of lodging and food services, which is crucial for assessing consumer demand, shrank by 125,000.

The only sector to have a discernible increase was construction, which saw 129,000 additional positions become available.

In March, private payrolls increased by 145,000, far less than anticipated, according to ADP.

Three days before the latest nonfarm payroll figures for March, the JOLTS release will be made public. The Labor Department’s count on Friday is anticipated to reflect an increase of 238,000 while the unemployment rate remains unchanged at 3.6%.

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