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First Cut: JOLTS data reflects slow hiring in February, but should rebound in March

The data on Job Openings and Labor Turnover (JOLTS) for February was the softest in nearly a year for job openings (-538,000 to 7.087 million, lowest since 6.894 million in March 2018) and hiring reached a six-month low (down 133,000 to 5.696 million, lowest since 5.670 million in September 2018). However, levels for job separations in February was little changed (up 24,000 to 5.556 million) inclusive of the number of voluntary job quits (down 3,000 to 3.480 million). The Employment Situation for March released on Friday, April 5 has already made it clear that the lower readings for February should be a one-off. Other regional and/or private data reports have also reinforced that there are still plenty of job openings to be filled — although qualified applicants are scarce.

Net turnover — new hires less separations — was up 140,000 in February, reflecting the slower pace of hiring and the mild increase in job loses. Although it was down in February, the change is well in line with the overall tone of this series.

The job openings rate was 4.5% in February, down three-tenths from the prior month and the lowest since 4.4% in March 2018. The hires rate was 3.8%, holding in the tight range of 3.7%-3.9% where it has for nearly two years. The separations rate is also holding in a narrow range of 3.6%-3.8%, and March was at the center at 3.7%. The rate for voluntary job leavers has been at 2.3% since June 2018. There is no hint that workers who are leaving jobs for other opportunities are less than confident about their prospects. All these numbers are consistent with a vibrant labor market.

The Beveridge Curve measures the rate of job openings versus the unemployment rate. Present conditions are only marginally less good than in recent months. The curve has pointed to a very tight labor market for over a year and even a modest easing would not reflect significantly diminished strength.

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