Dive Brief:
- Hiring quickened in March and the number of job openings held steady, the Bureau of Labor Statistics said Tuesday, belying several months of concern that the labor market was weakening.
- The number of hires surged 655,000 compared with February to 5.6 million and the hiring rate rose to 3.5% in March. The gains offset losses in those measures during February, the BLS said, noting increases in transportation, warehousing and utilities. The number of job openings was unchanged at 6.9 million.
- Despite the positive data, companies are not digging deep into the job market, Pantheon Macroeconomics Chief U.S. Economist Samuel Tombs said. The BLS “report undermines the theory that labor demand is picking up,” he said in a note, flagging that job openings in March were 3% below their average last year.
Dive Insight:
In a sign of persistent labor market weakness, layoffs and discharges in March rose by 153,000 compared with February, the Labor Department said.
At the same time, the quit rate — or the share of workers who voluntarily leave their job — rose 0.1 percentage point to 2%, implying slightly greater confidence in finding employment.
The report on job openings aligns with a broader BLS report for March showing that unemployment dipped to 4.3% and payrolls, while shy of gains in 2025, rebounded with an unexpected 178,000 increase.
The data affirmed the view of many economists that the labor market is poised at an unusual “low-hire, low-fire” balance.
“A good part of the slowing in the pace of the job growth over the past year reflects a decline in the growth of the labor force due to lower immigration and labor force participation, though labor demand has clearly softened as well,” Federal Reserve Chair Jerome Powell said on April 29.
Powell spoke after policymakers decided to keep the federal funds rate at a range between 3.5% and 3.75%.
Given the current level of borrowing costs, Fed officials are well positioned to trim the benchmark interest rate to stoke demand for labor should unemployment rise, or increase the rate if inflation shows signs of accelerating, Powell said.
“The good news is, we think our policy stance is just in a very good place for us to wait and see,” he said during a press conference, noting that the uncertain duration of the Iran conflict clouds forecasts for the path of inflation.
“The labor market shows more and more signs of stability, whereas inflation is kind of misbehaving, and so maybe a little bit of restriction, or the high end of neutral, is just the right place to be,” Powell said.
The employment report for April is scheduled for release on Friday.
