U.S. Job Market Cooling in 2025: April Job Openings Drop to 8.1 Million

Diccon Hyatt is a seasoned financial and economic journalist who has extensively covered the pandemic-era economy through hundreds of articles over the past two years. He specializes in translating complex financial subjects into clear, relatable insights on how economic trends affect personal finances and markets. His professional background includes contributions to U.S. 1, Community News Service, and the Middletown Transcript.

Key Insights

• Job openings in the U.S. fell to 8.1 million in April 2024—the lowest since February 2021—as the once red-hot job market cools steadily.
• Layoffs remain near historic lows, suggesting stability rather than a sharp market downturn.
• Fewer job changes reduce upward pressure on wages and inflation, potentially influencing the Federal Reserve's monetary policy.
• Job security remains robust even as opportunities for raises and job-hopping decrease.

The U.S. job market is increasingly resembling the pre-pandemic landscape as employers temper their hiring enthusiasm that was previously insatiable.

According to the Bureau of Labor Statistics’ April 2024 report, job openings decreased to 8.1 million, down from a revised 8.4 million in March. Economists had anticipated a smaller dip, highlighting a more pronounced cooling than expected.

Worker resignations nudged up slightly to 3.5 million in April, still close to pre-pandemic norms and well below the 4.5 million peak in April 2022, indicating fewer opportunities for job switching and wage increases.

Positively, layoffs remain near historic lows, with only 1.5 million workers laid off—marking the fewest since December 2022.

This data continues a trend of reduced labor market churn: hiring, firing, and layoffs have all slowed since job openings peaked above 12 million in March 2022. For workers, this may mean smaller raises ahead, but it also eases inflationary pressures, benefiting household budgets.

Bill Adams, chief economist at Comerica Bank, notes that four years after the pandemic upheaval, U.S. labor supply and demand are returning to a balanced state.

The Federal Reserve’s series of interest rate hikes since March 2022, aimed at curbing inflation by discouraging borrowing and spending, have influenced these labor market changes. Rising borrowing costs affect mortgages, credit cards, and other loans, reflecting the Fed’s strategy to cool the economy and temper wage growth.

Could Reduced Hiring Lead to Future Layoffs?

Despite historically strong job security, experts warn that continued labor market slowdowns could eventually increase unemployment. Nick Bunker, Indeed’s North America economic research director, cautions that further declines in job openings might precede a rise in layoffs and unemployment rates.

Job Market Trends May Prompt Interest Rate Cuts

The drop in job openings has boosted market expectations for a Federal Reserve interest rate cut, with probabilities for a September 2024 reduction rising to nearly 66%, up from 59.6% the previous day, according to CME Group’s FedWatch tool.

Economist Ali Jaffery of CIBC highlights that although labor market adjustments have been uneven, the cooling demand for workers signals easing wage pressures. However, the Fed will require continued inflation progress before easing monetary policy later this year.

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