Source: Economics Group of Wells Fargo Bank, N.A.
Summary
The March JOLTS report showed employers growing cautiously pessimistic about the outlook. Job openings fell to 7.2 million as policy uncertainty intensified, while the hiring rate was unchanged despite a slight pickup in quits garnering the need to backfill more positions. Even as interest in bringing on new workers cooled, businesses are still reluctant to pare back current staff; the layoff & discharge rate slipped in March and remains below its pre-pandemic rate.
Pulling Back to Hold the Line
Uncertainty has crimped already-flagging labor demand. Job openings fell more than expected to 7.2 million in March, just above last year’s low of 7.1 million in September. The decline aligns with separate data showing job postings on Indeed resuming their downward slide after briefly stabilizing in late 2024 and small business hiring plans pulling back to their lowest level in a year (chart). The fall in job vacancies coincided with essentially unchanged unemployment in March, leading the job openings-to-unemployed workers ratio down to 1.02 (chart). In our view, the resumption of this ratio’s decline in the past month is reflective of a steady weakening in labor demand, rather than a benign rebalancing of supply and demand.