WASHINGTON, D.C.: U.S. job openings rose unexpectedly in April, reaching their highest level in nearly a year, but economists cautioned that the increase may not reflect stronger labor market conditions as hiring activity weakened and workers grew more reluctant to change jobs.
The Labor Department's Job Openings and Labor Turnover Survey (JOLTS) showed vacancies increased by 731,000 to 7.618 million at the end of April, the largest monthly rise since 2021. Economists surveyed by Reuters had expected 6.88 million job openings.
Much of the increase came from the professional and business services sector, which accounted for roughly 91% of the gain, raising questions about whether the jump overstated underlying labor demand.
"The labor market remains mostly stable," said Matthew Martin, senior U.S. economist at Oxford Economics. "Without a concrete end to the war in Iran in sight, higher oil prices will reduce aggregate demand by crimping real incomes. Coupled with increased uncertainty, businesses are likely to pull back further on hiring intentions."
Professional and business services vacancies increased by 668,000, while health care and social assistance added 89,000 openings. Job openings also rose in construction, manufacturing, transportation, warehousing and utilities, as well as state and local government.
However, vacancies in the finance sector fell by 134,000, while accommodation and food services and retail trade also recorded declines.
Some economists questioned whether the sharp rise in openings would hold up in future revisions.
"Sharp drops in openings in this sector in previous months have been revised away as more data have been collected," said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics. "It is just as likely that April's big increase in openings also proves illusory."
Despite the increase in vacancies, hiring weakened significantly. Employers hired 5.116 million workers in April, down 419,000 from the previous month. The decline was broad-based and led by professional and business services, which saw hiring fall by 131,000.
Retail trade hiring dropped by 81,000, while transportation, finance, healthcare and accommodation sectors also posted notable declines. The hiring rate fell to 3.2% from 3.5% in March.
Economists said the labor market remains in a "slow-hire, slow-fire" mode, with businesses reluctant to expand payrolls amid uncertainty linked to the Iran conflict and rising commodity prices.
Workers also appeared less confident about changing jobs. Resignations fell by 183,000 to 2.977 million, the lowest level since August 2020. The quits rate, often viewed as a measure of worker confidence, slipped to 1.9% from 2.0%.
At the same time, layoffs remained relatively subdued. Layoffs and discharges fell by 192,000 to 1.692 million, with declines reported in professional services, retail trade and construction. The layoffs rate eased to 1.1% from 1.2%.
"Neither employees nor employers are looking to make changes to employment in the near term," Martin said.
Economists expect Friday's employment report to show payroll growth slowed to 85,000 jobs in May, while the unemployment rate likely held steady at 4.3%.
