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Job openings data shows US labor market remains 'quite healthy'

Job openings ticked up slightly in February as hiring also increased, reflecting further signs of resilience in the US labor market.

New data from the Bureau of Labor Statistics released Tuesday showed there were 8.76 million jobs open at the end of February, a slight increase from the 8.75 million job openings in January, which was revised lower. Economists surveyed by Bloomberg had expected the report to show there were 8.73 million openings in February.

The Job Openings and Labor Turnover Survey (JOLTS) survey also showed 5.8 million hires were made during the month, a slight increase from the 5.7 million seen in January.

The hiring rate picked up slightly to 3.7% in February, up from the 3.6% rate seen in January.

"The February Job Openings and Labor Turnover Survey report is consistent with a labor market that is still quite healthy," Oxford Economics lead US economist Nancy Vanden Houten wrote in a note to clients on Tuesday.

The JOLTS report also showed the quits rate, a sign of confidence among workers, held at 2.2% for the fourth consecutive month.

Though the data from Tuesday's release is from February and other labor market data due out this week will reveal any movements in March, Citi economist Veronica Clark noted that both hires and quits are "useful indicators of labor market patterns."

"It would be an encouraging sign that demand for labor is not continuing to weaken if hiring and quits rates remain stable at these levels into the spring," Clark wrote in a note to clients on Tuesday.

While Clark believes some softening in the labor market could be in the pipeline, the current data reflects continued strength in the labor market, supporting an economy that's continued to grow faster than expected.

Vanden Houten noted that data like Tuesday's likely eases any concerns "about the downside risks to the economy from taking a patient approach toward rate cuts" for now. With consensus feeling increasingly better about economic growth, the view among economists is the Fed could wait to hold rates as long as the employment side of its dual mandate holds up.

The Fearless Girl statue  is seen in front of the New York Stock Exchange (NYSE) on April 30, 2020 in New York City. - Wall Street stocks opened lower Thursday following another spike of jobless claims in the wake of coronavirus shutdowns, offsetting strong results from tech giants. Another 3.84 million US workers filed for unemployment benefits last week and the total has now passed 30 million in six weeks, according to the Labor Department data. (Photo by Johannes EISELE / AFP) (Photo by JOHANNES EISELE/AFP via Getty Images)
The Fearless Girl statue is seen in front of the New York Stock Exchange (NYSE) on April 30, 2020, in New York City. (JOHANNES EISELE/AFP via Getty Images) (JOHANNES EISELE via Getty Images)

The JOLTS report kicks off a busy week of labor market data that will include updates from the private sector on Wednesday and end with the March jobs report from the Bureau of Labor Statistics on Friday. Expectations are for those reports to tell a similar story to that of the February JOLTS data.

The March jobs report is expected to show 215,000 nonfarm payroll jobs were added to the US economy last month with unemployment falling to 3.8%, according to data from Bloomberg.

Bank of America US economist Michael Gapen wrote in a note to clients that they expect the report to show further signs of cooling in the labor market.

Their projections for a wage growth decline while the US economy adds 200,000 jobs would be enough to keep inflation concerns at bay, while the overall story will remain strong enough to quell any worries about the labor market deteriorating, per Gapen.

"[The March jobs report] should re-anchor expectations for a cooling labor market, but not one that is showing significant signs of weakness," Gapen wrote.

Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.

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