Job openings in the United States declined in April to hit the lowest level in more than three years, with the decline likely to play a role in the Federal Reserve’s decision to cut interest rates.
A cooling labor market is a crucial consideration for the U.S. Federal Reserve as it decides when to initiate interest rate cuts.
While yearly job openings declined, the number of hires and total separations were “little changed,” the BLS noted.
“If companies hold on to workers, the US Economy can chug along, but if the unemployment rate spikes, the US Consumer will rapidly retrench, and the economy will slow down non-linearly, potentially leading to a recession,” Mr. Lisi said.
US Economic Projections
The most recent U.S. Leading Economic Index data showed that the index continued to decline in April, suggesting “softer economic conditions” ahead for the U.S. economy.Justyna Zabinska-La Monica, senior manager at The Conference Board, pointed out “serious headwinds” to growth, with elevated inflation, high interest rates, rising household debt, and depleted pandemic savings expected to weigh on the U.S. economy this year.
“As a result, we project that real GDP growth will slow to under 1 percent over the Q2 to Q3 2024 period,” she said.
However, not everyone has a negative view of the economy.
The firm expects U.S. consumer spending, investment, and government spending to grow by at least 2 percent this year and exports by 4 percent.
It predicts the Fed will cut interest rates twice in the second half of 2024. Job growth may slow while the unemployment rate is projected to peak at 3.9 percent before gradually declining because of “persistently tight labor markets,” according to the company.
“Despite an expected slowdown in the coming quarters, we expect the US economy to post real growth of 2.4 percent this year and 1.4 percent in 2025,” Deloitte said.
Layoffs in 2024
According to a May 2 report by global outplacement firm Challenger, Gray & Christmas Inc., U.S. companies announced 322,043 job cuts in April. That was only 4.6 percent lower than the year-earlier period, suggesting that employers still see job reductions as crucial.“The labor market remains tight. But as labor costs continue to rise, companies will be slower to hire, and we expect further cuts will be needed. This low April figure may be the calm before the storm,” said Andrew Challenger, senior vice president at the firm.
Searching for jobs is taking longer than usual. In the first quarter of 2024, the average job search lasted 3.05 months, higher than 2.71 months in the same quarter a year back.
Cost-cutting was found to be the No. 1 reason for layoffs this year, accounting for more than 73,000 terminations. That was followed by “restructuring” plans at various firms.
U.S. employers announced plans to hire 9,802 workers in April, which the report notes was the lowest total for the month going back more than a decade to April 2013.
“For the year, employers have announced plans to hire 46,597 workers, the lowest total in the first four months of the year since 2016, when 38,445 hiring plans were recorded,” the May 2 report states.
