Hiring in March increased to the highest rate since February 2024, a surprise sign that the labor market may have dynamism, despite the “low-hire, low-fire” pattern that has characterized the past few years.
The number of hires in March increased 655,000 to 5.6 million and the rate of hiring ticked up to 3.5%, according to an update to the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey. The survey reports gross hiring and firing, rather than the more widely cited net figures in the monthly jobs reports.
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Hires increased in transportation, warehousing, and utilities, professional and business services, and accommodation and food services. Federal government jobs decreased slightly in March.
The report marks a reversal from the February JOLTS report, which raised alarm bells because the hires rate fell to 3.1%, the lowest rate since the entire economy was shut down at the height of the COVID-19 pandemic in April 2020.
“Hires are up,” said Carl Weinberg, chief economist at High Frequency Economics. “In general, the levels of openings and hires are down from their post-pandemic peaks but remain high relative to the historical record before the pandemic.”
Both hiring and layoffs have drifted down over the past two years, leading to a relatively stagnant labor market, but not a recession. Federal Reserve Chairman Jerome Powell has described the situation as a “low-firing, low-hiring environment.” While hiring has been well below the pre-pandemic level in recent months, so too have layoffs. The result has been that the unemployment rate has not shot up.
The JOLTS also showed that job openings, another sign of labor market strength, fell from 7.2 million in January to 6.9 million last month. Job openings have slid since peaking in March 2022, with a recent low of 6.6 million notched in December.
The “quits rate” measures the share of people who voluntarily left their jobs and includes those who left their previous employment for another job and people who quit but are confident they will soon find new employment. This rate rose slightly to 2%. It has been relatively flat over the past several months, but it shows that people are holding on to the jobs they have.
The separate monthly jobs report showed that the economy added 178,000 jobs on net in March, and the unemployment rate fell slightly to 4.3%. Still, employment growth has generally slowed over time.
Energy prices have shot up in recent months because of the war with Iran — a barrel of oil before the war was about $65 and has now increased by over 60%.
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Still, the report bodes fairly well for the labor market right now.
“However, this picture of the labor market will change as the economy adjusts to $100+ a barrel oil, higher inflation, possibly tighter monetary conditions and global recession starting in Asia, where many production supply chains are rooted,” Weinberg said in a note. “For today, though, the picture is of a steady labor market.”
