US Job Openings Fall Below 10 Million for First Time in 2 Years... Manufacturing Sector Also Contracts

Signs of Cooling in Overheated Labor Market... PMI Hits Lowest in 3 Years
Market Weighs Fed Rate Hold

The number of job openings in the U.S. in February fell below 10 million for the first time in about two years, indicating that the overheated labor market is beginning to cool down. The manufacturing Purchasing Managers' Index (PMI) also recorded its lowest level in about three years, suggesting that the overheated economy has entered a contraction phase. Based on these indicators, market expectations are increasingly leaning toward the U.S. holding interest rates steady next month.

According to the February Job Openings and Labor Turnover Survey (JOLTs) released by the U.S. Department of Labor on the 4th (local time), the number of job openings in February was 9.931 million, down about 630,000 from the previous month. This is the first time in about two years since May 2021 that monthly job openings have fallen below 10 million.

Daniel Zhao, Chief Economist at Glassdoor, analyzed, "This will be the biggest news today," adding, "It reflects the continued cooling of the labor market." He viewed this as a sign that the U.S. labor market, which had been overheated, is slowing down due to last year's Federal Reserve's aggressive tightening measures.

January's job openings were also revised downward from 10.824 million to 10.563 million. Wall Street expects that the nonfarm payrolls report for March, to be released on the 7th, will show an increase of around 240,000 jobs, down from 311,000 in the previous month.

The manufacturing economy is also cooling. According to the Institute for Supply Management (ISM), the manufacturing PMI, a leading economic indicator, recorded 46.3 in March. This is the lowest level in three years since May 2020, falling short of both the previous month's figure (47.7) and experts' expectations (47.3). A PMI below 50 indicates economic contraction, while above 50 indicates expansion.

Fears of a recession are spreading again in the market. The market is slightly leaning toward the expectation that the Fed will hold the benchmark interest rate steady at the May Federal Open Market Committee (FOMC) meeting. According to the CME FedWatch tool, as of this day, the federal funds futures market reflects a 57% probability of a rate hold in May, up from the 42% range the previous day.

According to the GDPNow model, an estimate of gross domestic product (GDP) by the Federal Reserve Bank of Atlanta, the growth forecast for the first quarter of this year has been sharply revised down to an annualized rate of 1.7% from 3.5% two weeks ago.

Julien Emmanuel, Director at Evercore ISI, diagnosed, "We are currently only feeling the initial effects of tightening," adding, "Although the recession will be shallow, it will occur, and the stock market will be the hardest hit as a result."

This content was produced with the assistance of AI translation services.