Today’s federal Job Openings and Labor Turnover Survey (JOLTS) report signals that while the US labor market remains hot, the temperature might be dropping. Demand for workers has leveled off, and the rate at which workers quit their jobs is no longer climbing. Employers are having a harder time filling jobs than they were pre-pandemic, but the recent trends point toward some easing on these hiring constraints. These trends are in their early stages, but they are worth tracking.

Job openings are still very elevated compared to their pre-pandemic level, and they are up 60.8% since February 2020. However, openings have moved sideways in recent months, and Indeed job postings data suggests demand for workers has only cooled since late February. Similarly, workers are no longer picking up the pace at which they quit as job openings are no longer growing as quickly.

The labor market might be cooling a bit, but still remains quite hot compared to pre-pandemic norms. There were 1.8 job openings for every unemployed worker in February, a much higher reading than the ratio of 1.2 back in February 2020. Workers also have an increased sense of security as the layoff rate remains near all-time lows. The job-filling rate might have picked up a bit, but the rate at which openings yield hires is still lower than it was pre-pandemic.

At the end of February, the labor market was very tight. Job openings remain elevated and workers are seizing those opportunities by quitting their jobs. But there are indications we are in the early stages of a relative cooldown. Whether this easing is gradual and contained or turns into a broader deterioration depends on forces outside the labor market.