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April 29, 2025

Job openings dropped in March. There were 7.2 million jobs available, according to the latest Job Openings and Labor Turnover Survey (JOLTS). That was down 300,000 from the month before and the lowest number since September 2024; it is the second lowest number in over four years.

On a three-month moving average basis, openings have remained within the range of 7.4 million to 7.8 million since June 2024. Large monthly shifts often reverse. This time, however, the drop is more concerning, given the threats to the labor market from uncertainty, tariffs, immigration policy and federal government layoffs.

Job openings fell the most among small businesses, especially those with 10-49 employees. The three-month moving average number of openings has dropped by nearly 300,000 so far in 2025 to 3.3 million. Small businesses are likely hunkering down in the face of uncertainty about new policies. They generally have smaller margins to absorb large input cost increases; they are also less likely than big companies to receive exemptions from tariffs.

Real-time data from Indeed Hiring Lab show that advertised job postings have fallen nearly four percentage points so far in 2025: to 107.7 from 111.5. Postings have cratered in the Washington, DC area due to government layoffs; they are trending down in large states across different regions in the US. Overall postings still look flat for April, but risks are to the downside.

Job openings declined in both the private and public sectors. Labor demand continued to cool in the three industries that have powered job gains since mid-2023: healthcare and social assistance (-37,000), leisure and hospitality (-45,000) and state and local government (-24,000).

There were only 98,000 job openings in the federal government at the end of March; they declined by 59,000 compared to February. That is the lowest number in over four years. They are likely to come down further in the months ahead.

The professional and business services industry captures the reality of the generally stable, cooling labor market at the end of March. Job openings, hires, quits and layoffs all declined month-over-month.

The ratio of job openings to unemployed job seekers, a measure of balance in the labor market tracked closely by Federal Reserve officials, fell to 1.0. It had been 1.1 for five straight months.

The hiring rate remained flat at a low 3.4% for the fourth straight month. In construction, the hiring rate declined to 3.6% from 4.2%. That is the lowest hiring rate on record since the JOLTS data were first collected in December 2000. Construction is reeling from input cost increases due to tariffs and immigration policy; high mortgage rates have sapped consumer demand and builder confidence.

Some good news: Layoffs fell month over month. The rate slipped to 1.0% from 1.1%. That is near historic lows. Layoffs rose by 17,000 in state and local government excluding education. That is the highest number of layoffs in this sector in over four years. It may reflect the spillover effects of cuts to federal funding. To the extent that state and local governments cannot absorb laid off federal workers, that will result in a rise in unemployment, a drop in participation or both.

The quits rate ticked up slightly to 2.1% from 2%. On a three-month moving average basis, the rate was flat. ADP data show that the wage premium for switching jobs fell to 6.5% in March. That is the lowest rate in four years. The , a proxy for worker bargaining power, ticked up when quits rose and layoffs fell. Risks remain to the downside that this trend is short-lived.