The Federal Reserve got one last piece of economic data Tuesday as it mulls another interest rate hike: the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey for the month of March. 

And the JOLTS report brought yet another sign of a gradually cooling labor market. The number of job openings decreased for the third straight month, though it’s still historically high. There are almost 9.6 million “help wanted” signs out there. 

Meanwhile, the number of people quitting their jobs ticked down just a bit, while layoffs were up slightly. So, what do those numbers mean for the Fed’s goal of getting inflation under control? 

In a labor market with lots of job openings and not a lot of job seekers, employers have to raise pay. That’s great for individual workers, but not always great for the economy at large, per Wendy Edelberg with the Brookings Institution. 

“If the only reason that they’re paying higher wages is to entice people to take jobs, that’s an input cost rising that they’re going to have to pass along through higher prices,” she said.

Higher pay eventually means higher costs for the rest of us, and that’s why you can’t tame inflation without taming the red-hot pandemic job market, added Edelberg.

And after lots of up-and-down jobs data, “job openings are just falling like a rock,” she said.

“Big picture, churning in the labor market is beginning to calm down,” said Peter Philips, a labor economist at the University of Utah. Sectors that boomed in 2022 — like retail and hospitality — are now tamping the brakes on hiring. 

Workers are a little less inclined to quit their jobs, but we’re also not seeing mass layoffs. “It sort of has some of the flavor of a soft landing from the turmoil and the volatility of the pandemic,” he said.

For the labor market at least, these are signs that the Fed’s rate hikes are finally doing what they’re supposed to, according to University of Michigan professor Betsey Stevenson. 

“Their policy choices often have lagged effects,” she said. “So we’re likely to see the labor market continue to tighten over the next few months.”

Things are moving in the direction the Fed wants, Stevenson added — just not as quickly as it wants.