The U.S. labor market experienced some softness in February even before the onset of the Iran war that has disrupted supply chains and lifted prices of commodities. On a positive note, consumer confidence unexpectedly climbed in March but along with the improvement, consumers’ inflation expectations also increased.
Job Openings Dip: A report released by the Bureau of Labor Statistics on Tuesday showed that February job openings fell month over month and trailed expectations. The number of job openings came in at 6.882 million in February compared to January’s revised reading of 7.240 million and the consensus estimate of 6.890 million.
The biggest drags were from accommodation and food services (down 211,000) and from mining and logging (down 12,000).
The number of hires decreased to 4.8 million, while total separations remained little changed at 5 million.
Source: BLS
Commenting on the report, LPL Financial Chief Economist Jeffrey Roach noted that quit rate and the hiring rate fell in February as the labor market cooled from the headwinds of inflation and tariff uncertainty. The economist expects the potential impact of Operation Epic Fury to show up only next month.
“For most workers, the uncertainty within the job market has suppressed the desire to move from one job to another. On the labor demand side, firms have pulled back on hiring rates,” Roach said.
Consumers Stay Resilient: The Conference Board’s consumer confidence survey for March showed the headline index edging up by 0.9 points to 91.8 from 91 in March. The survey was conducted between March 1-24.
Conference Board Chief Economist Dana Peterson said, “Three of five components of the Index firmed in March, and overall confidence improved modestly for a second month. Nonetheless, the Index has been on a general downward trend since 2021.”
Among the other indices:
- The Present Situation Index climbed 4.6 points to 123.3.
- The Expectations Index, however, fell 1.7 points to 70.9.
- The 12-month inflation expectations surged to an eight-month high
- The net percentage of consumers stating that interest rates will be higher over the next 12 months surged to 42.4% from 34.9%.
- The expectations for higher stock prices a year from now, plunged.
- Consumers’ net view of their Family’s Current Financial Situation improved slightly in March. But expectations of their future financial situation were less optimistic.
- The share of consumers stating that a U.S. recession is very likely over the next 12 months increased.
Source: Conference Board
The Conference Board stated that “While not obvious in the headline or its component indexes, the weight of rising costs due to tariff passthrough and spiking oil prices was evident among other measures in the survey like inflation expectations.”
Regional Business Barometer Slips: The Chicago area business conditions fell 4.9 points to 52.8 in March, trailing the consensus estimate of 54.8. Despite the decline, the business activity expanded for a third straight month. A reading above ‘50’ signals expansion and that below the level points to contraction.
Dollar Cuts Losses: The U.S. dollar Index futures, which fell sharply early Tuesday amid hopes that the Iran war may end, cut some of the losses following the mixed batch of data.The stock index futures held their gains, with the E-Mini S&P 500 (ES), the Nasdaq 100 (NQ) and Dow (YM) futures all trading notably higher.
