U.S. Job Openings Fall Below 7 Million as Hiring Hits Post-Pandemic Low, JOLTS Shows

U.S. employers posted fewer than 7 million job openings in February and hired workers at the slowest pace since the early months of the COVID-19 pandemic, fresh government data show, underscoring a labor market that is cooling after several years of extraordinary strength.

Openings and hires decline

Job openings edged down to about 6.9 million on the last business day of February, while hires fell to roughly 4.8 million, the U.S. Bureau of Labor Statistics reported Tuesday in its latest Job Openings and Labor Turnover Survey, known as JOLTS. The hires rate slipped to 3.1% of employment, the lowest since April 2020, when much of the economy was still under lockdown.

The report adds to a growing body of evidence that the post‑pandemic hiring boom has given way to something more subdued: a “low‑hire, low‑fire” job market in which companies are reluctant to expand but also slow to resort to layoffs. That shift is central to how workers experience the economy and to how the Federal Reserve calibrates interest rates in the face of persistent inflation and rising geopolitical risks.

Vacancies fall below the number of unemployed

In February, employers advertised fewer positions than there were people looking for work, a reversal from the past several years. The number of unemployed workers stood at about 7.6 million, compared with 6.9 million openings. That translates to roughly 0.9 job openings per unemployed person nationwide, down from a ratio that peaked near two openings for every job seeker in 2021 and 2022.

Fed Chair Jerome Powell has repeatedly cited that vacancy‑to‑unemployment ratio as a key gauge of labor‑market tightness. In a news conference after the central bank’s March policy meeting, Powell said that when recent data are adjusted for suspected overcounting, “there’s effectively zero net job creation in the private sector,” describing what he called a “zero‑employment growth equilibrium” that carries “a feel of downside risk.”

The JOLTS report, which covers February, followed the Labor Department’s separate Employment Situation summary released March 6 that showed nonfarm payrolls fell by 92,000 that month and the unemployment rate rose to 4.4% from 4.3%. Taken together, the two reports suggest labor demand is easing more noticeably than it did last year, even as outright job losses remain limited.

A slower churn in the labor market

JOLTS tracks gross labor flows — job openings, hires and separations — from a survey of about 20,700 nonfarm business and government worksites. In February, total separations were little changed at around 5 million. Within that, quits held at 3 million and the quits rate slipped to 1.9% from 2.0% in January, far below the roughly 3% highs reached during the “Great Resignation” of 2022. Layoffs and discharges were steady near 1.7 million, a relatively modest level by historical standards.

The combination — weaker hiring and fewer voluntary departures without a sharp jump in layoffs — marks a sharp contrast with the dynamics that defined the recovery from the pandemic. Then, workers quit jobs in record numbers to chase higher pay and better conditions, and employers responded with aggressive hiring and bonuses.

“High vacancies and high quits were the story of 2021 and 2022,” said one labor economist at a major research firm. “What you see now is the flip side: employers sitting on the workers they have, and workers hanging onto jobs because they’re less confident about finding something better.”

Sector pullbacks: hospitality and construction

That shift is visible across a range of industries but is particularly pronounced in sectors that were once at the center of the hiring surge.

In accommodation and food services — a category that includes restaurants, bars and hotels — job openings fell by an estimated 211,000 in February, while hires dropped by about 178,000. Those businesses employ many younger and lower‑wage workers, and the decline suggests fewer entry‑level opportunities than in recent years.

Construction, another key employer of blue‑collar workers, registered a more severe pullback relative to its own history. Job openings in construction fell by 28,000 to roughly 202,000, which industry analysts say is the lowest level since JOLTS data began in 2000. Hires declined by about 88,000, and measures of labor “churn” in the sector — workers moving in and out of jobs — fell to record lows.

“That’s essentially a frozen labor market in construction,” said a chief economist for a national contractors’ association. “Existing crews are staying put, and there’s very little room for new workers to come in, even as we talk about the need for more housing and infrastructure.”

The latest figures also show small businesses pulling back. The job openings rate declined for establishments with one to nine employees, indicating that very small firms — often more vulnerable to higher interest rates and local demand shocks — are cutting back on hiring plans.

Uneven effects and widening gaps

At the same time, the national data mask uneven effects. Long‑term unemployment — joblessness lasting 27 weeks or more — rose to 1.9 million people in February and accounted for more than a quarter of all unemployed workers. Black unemployment stood at 7.7%, compared with 3.7% for white workers, according to the monthly jobs report.

Those disparities matter because a softer labor market tends to amplify existing gaps. When employers have more applicants per job, research has found, they can become more selective, and workers with less experience or facing discrimination often struggle the most to gain or retain employment.

What it means for the Federal Reserve

For the Federal Reserve, the JOLTS numbers complicate an already difficult balancing act. At its March 17‑18 meeting, the central bank held its benchmark interest rate in a range around 3.5% to 3.75%, signaling what analysts described as a cautious, or “dovish,” hold. Policymakers acknowledged that the labor market was showing signs of softening but pointed to elevated inflation — particularly from higher energy prices linked to escalating conflict with Iran — as a reason to avoid cutting rates too quickly.

Fed Governor Christopher Waller had said earlier in the month that the case for a rate cut at the March meeting was a “coin flip,” depending in part on how February’s labor data came in. Neel Kashkari, president of the Minneapolis Fed and a voting member of the rate‑setting committee, has described the job market as “resilient but softening,” adding that the slowdown makes decisions on when to reduce rates “more complicated.”

The JOLTS report is one of several indicators that Fed officials use to plot the path of the economy against the so‑called Beveridge curve, which maps the relationship between job vacancies and unemployment. Internal Fed research has suggested that a large decline in vacancies with only a small rise in unemployment would be consistent with a “soft landing,” in which inflation returns to target without a deep recession. The recent pattern of falling vacancies alongside rising joblessness and outright payroll losses is less reassuring.

The political backdrop adds further pressure. President Donald Trump and allies have criticized the Fed’s earlier rate increases, arguing they are now weighing on hiring and urging more aggressive cuts as growth slows. Powell and other Fed officials have emphasized the central bank’s dual mandate to promote both stable prices and maximum employment, and have warned that they cannot easily offset supply‑driven spikes in oil and gasoline prices.

What workers are feeling

Despite the changing tone in the data, economists caution against reading the February JOLTS report as evidence that a severe downturn is inevitable. Layoffs remain relatively low, and overall employment is far higher than before the pandemic. Wage growth, while moderating, is still running at an annual pace of about 3.8%, faster than in much of the decade before 2020.

But for many workers, the most immediate change is psychological. During the tightest phase of the recovery, surveys by the Federal Reserve Bank of New York found that Americans viewed their chances of finding a new job as unusually high and were more willing to take risks. More recent readings show the expected probability of voluntarily leaving a job has fallen to a series low, a trend reinforced by February’s drop in the quits rate.

The coming months will test whether the labor market is settling into a slower but sustainable expansion or edging toward something more serious. Analysts are watching whether hiring and quits stabilize, whether layoffs start to climb, and whether future JOLTS reports show job openings falling much further below the number of unemployed.

For now, the data point to an economy that is no longer overheating but may also be losing some of the dynamism that helped workers recover ground after the pandemic. For millions of employees who could once expect recruiters’ calls and ready offers, the question is increasingly not how quickly they can move up, but how long the job they have will remain their best option.