The JOLTs job openings declined by -325K in the month of March. Within that report, there was an oversized decline in the Construction sector.
More specifically, the construction sector showed a decline of -182K job openings for March. That took the job openings from 456K in February to 274K in March. That is quite a sharp move to the downside (see chart above) from an absolute level and also on a % basis (the decline was -40%).
We know rates have moved higher in 2024, but at the end of March (the JOLTS report was for March), the 10-year yield was at 4.21%. Rates in the 10-year sector (and across the curve) have since moved to a high last week of 4.739%, up about 53 basis points (10 year yield is now at 4.68%) . That's a 12.5% increase.
Will that hike in rates have a further dampening impact on the construction industry and job openings as rates dampen demand?
You can argue that it was a one-off. Maybe seasonals impacted in a negative way. Maybe the spring weather will lead to a rebound regardless of the higher rates.
What we know is the supply of homes is still too low. That infrastructure build is still in the pipeline. As a result, a softening of job openings in construction is a head-scratcher especially ahead of the run higher in rates. .
However, with the Fed focused on the economy, this is potentially one piece in the puzzle which shows a softening economy in an interest rate-sensitive sector worth noting.
The Fed rate decision will be announced at 2 PM ET today.
