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New data released this week shows the labor market appears to be cooling as the number of job openings decreased to 9.9 million on the last day of February, a 6% decline from the month prior, and the first time that the number of vacant jobs fell below 10 million in two years.

The largest decreases in job openings were in professional and business services (-278,000); healthcare and social assistance (-150,000); and transportation, warehousing, and utilities (-145,000). The number of job openings increased in construction (+129,000) and in arts, entertainment, and recreation (+38,000), according to the latest Job Openings and Labor Turnover report (JOLTS) from the U.S. Bureau of Labor Statistics.

The number of hires (6.2 million) and hiring rate (4%) in February were little changed. Quits, a sign of employee confidence in the ability to switch jobs, edged up by 146,000 to just over 4 million.

Quits increased in professional and business services (+115,000); accommodation and food services (+93,000); wholesale trade (+31,000); and educational services (+18,000). Quits decreased in finance and insurance (-39,000).

In February, the number of layoffs and discharges decreased to 1.5 million (-215,000). The rate was little changed at 1%. Layoffs and discharges declined the most in professional and business services (-157,000) in February compared to the month prior.

Prior to the February data, job openings had outnumbered available workers by nearly 2 to 1. The latest data bring that ratio down to less than 1.7 to 1.

The Federal Reserve has raised benchmark interest rates nine times since March 2022 as part of its efforts to cool the labor market and bring down inflation.