Employers were looking to fill around 8.8 million vacancies at the end of February, an indication that demand for labor in the U.S. economy remains very strong.
The Bureau of Labor Statistics released its Job Openings and Labor Turnover Survey on Tuesday. The report said that there were 8.756 million job openings on the last business day in February, a slight increase from the downwardly revised 8.748 million in the previous month.
This was slightly above the median estimate of 8.73 million in Bloomberg’s survey of economists.
Private sector openings dipped from 7.903 million to 7.855 million, offset by a rise in state and local government openings. Openings rose strongly in the arts, entertainment, and recreation sector as well as finance and insurance. Openings were down in the federal government.
The strong openings numbers may create further doubts about how soon the Federal Reserve will cut interest rates this year. Prices of futures contracts tied to Fed policy currently imply almost no chance of a cut in May and around a 57 percent chance of a cut in June, down from close to 80 percent a few weeks ago. Contracts tied to the Fed’s July meeting, which once indicated a near certainty of a cut, now imply a 75 percent chance of a cut. September futures contracts imply a 92 percent chance of a cut.
The market began the year with the view that the Fed would likely cut around six times in 2024, a forecast contrary to the projections of Fed officials predicting three cuts. At its March meeting, the projections of officials reaffirmed the prediction of three cuts this year and market prices have fallen in line with that view.
Speaking at an event at the Federal Reserve Bank of San Francisco last week, Fed chairman Jerome Powell said he views the strength of the economy as giving the central bank room to be patient when it comes to cutting rates.
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