US labour market data pointed to a cooling in demand for workers in February, even as consumer confidence showed unexpected resilience ahead of escalating geopolitical tensions linked to the Iran conflict.
Figures released by the Bureau of Labor Statistics showed that job openings fell to 6.88 million in February from a revised 7.24 million in January, broadly in line with economists’ expectations.
The decline suggests that labour demand was already moderating before the latest surge in uncertainty triggered by the Middle East crisis.
Hiring activity also weakened noticeably.
The number of hires dropped by nearly half a million to 4.85 million, marking one of the sharpest monthly declines in recent years.
Labour demand weakens across sectors
The slowdown in job openings was particularly evident in sectors sensitive to consumer spending and commodity cycles.
Vacancies fell in accommodation and food services by 211,000 and declined modestly in mining and logging.
Hiring trends reflected similar weakness.
Recruitment fell sharply in accommodation and food services as well as construction, underscoring a broader pullback in labour demand.
The hiring rate dropped to 3.1%, its lowest level since April 2020, when pandemic-related disruptions had severely curtailed economic activity.
Despite the slowdown in hiring, overall separations remained relatively stable at around 5 million.
Within that, voluntary quits held steady at 3 million, while layoffs and discharges were unchanged at 1.7 million, indicating that employers are still cautious about reducing headcount.
Consumer sentiment shows resilience
In contrast to the softening labour data, a separate survey from The Conference Board indicated that consumer confidence remained stable in March.
The Conference Board’s sentiment index edged up to 91.8 from 91 in February, defying expectations of a decline.
The reading suggests that, for now, households are holding up despite rising energy prices and financial market volatility.
Dana Peterson, chief economist at the Conference Board, said cost-of-living pressures remain a key concern for households.
Many respondents highlighted frustration with higher energy prices, reflecting the impact of rising oil costs on household budgets.
However, perceptions of the labour market remained broadly steady.
The labour-market differential, which measures the gap between respondents who see jobs as plentiful versus hard to get, ticked up slightly to 5.8 percentage points, indicating a marginal improvement in sentiment.
Outlook clouded by geopolitical risks
The latest data largely reflects conditions before the escalation of the Iran conflict, which has since added fresh uncertainty to the economic outlook.
Rising oil prices have already begun to weigh on financial markets, with the S&P 500 falling 7.8% in March, erasing gains accumulated over previous months.
While the underlying fundamentals of the US economy — including moderate unemployment and steady growth — remain intact, the combination of softer labour demand and rising cost pressures could test resilience in the coming months.
Economists say the trajectory of energy prices and the duration of geopolitical tensions will be critical in determining whether the recent stability in consumer sentiment can be sustained.
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