Grim but noisy data
All the major indicators moved in the wrong direction.
March 31, 2026
Job openings edged lower in February. There were 6.9 million jobs available, according to the latest Job Openings and Labor Turnover Survey (JOLTS). Openings have been flat since December on a three-month moving average basis.
The ratio of job openings to unemployed job seekers, a measure of balance in the labor market tracked closely by Federal Reserve officials, declined to 0.9 in February from 1 in January. The ratio has been between 0.9 and 1 over the past year. That suggests a relatively stable labor market that has cooled compared to the post-pandemic period through 2024.
Real-time data from Indeed Hiring Lab show that the number of advertised job postings has been flat since December. Postings declined by nearly two percentage points in March. It is too early to know if that was a temporary blip or the beginning of a sustained decrease.
JOLTS indicators declined in the accommodation and food services industries in February: job openings (-211,000), hires (-178,000) and quits (-119,000). The DHS/TSA shutdown likely amplified weakness by disrupting travel flows and increasing uncertainty. Elevated prices for travel and food dampened demand. Still, with a hiring rate of 5.3%, up from 4.6% a year ago, the weakness may be temporary.
Job openings declined by 307,000 in the private sector and 51,000 in the public sector in February. Many of those declines represented a regression to the mean following a large jump in January, added to the weakness in accommodation and food services.
The hiring rate declined to 3.1% from 3.4%. Apart from the pandemic, that is the lowest hiring rate since 2011, when the unemployment rate was over 9%. On a three-month moving average basis, however, hiring was flat at 3.3% for the seventh straight month.
Layoffs rose to 1.1% from 1%. They ticked up to 1.1% on a three-month moving average basis too; the layoff rate has hovered near that mark since September 2024.
The overall quits rate edged lower to 1.9% from 2%, the same rate as in September and October. Quits came in flat at 2% on a three-month moving average basis for the third straight month.
Consumer sentiment fell in March, erasing modest gains in January and February, according to the University of Michigan. Workers are pessimistic about the labor market; they are remaining in place.
The Fed may raise rates before it cuts rates given the tension in its now dueling mandate between maximum employment and price stability.
Matthew Nestler, PhD
KPMG Senior Economist
Bottom Line
The February JOLTS data show a decline in job openings, hiring and quits along with an increase in layoffs. All the major indicators moved in the wrong direction. Do not overreact to one month of data, however. The monthly data are noisy. On a three-month moving average basis, hiring and quits were flat. Monthly fluctuations in accommodation and food services drove a large share of the deterioration.
Uncertainty around the length of the Iran War will affect the labor market in the months ahead. The most likely outcome is a continuation of the low churn labor market, with low hires, layoffs and quits. We expect inflation to rise due to the energy shock. Concerns about stagflation abound. The Fed may raise rates before it cuts rates given the tension in its now dueling mandate between maximum employment and price stability.
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Job openings rise, layoffs fall
Small businesses most affected by events.
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