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Job openings show surprise increase in April

Job openings in April rose to their highest level since January. The resilient labor market data adds to a growing narrative that continuously strong economic data could prompt the Federal Reserve to hike interest rates again in June.

The latest Job Opening and Labor Turnover Survey, or JOLTs report, released Wednesday revealed 10.1 million job openings at the end of April, an increase from the 9.8 million in job openings reported in March. Economists surveyed by Bloomberg had expected 9.4 million openings in April.

The strong job openings print adds to the largely resilient data that's come in since the last Federal Reserve meeting and has markets pricing in another interest rate hike in June.

Market pricing for a rate hike in June shot up after the Wednesday's JOLTS report. Entering the day, markets had priced in a less than 60% chance of a hike in June. About 15 minutes after the report, markets had priced in a 71% chance of a hike, according to the CME FedWatch Tool.

"After falling throughout Q1, job openings surprised to the upside in April, signaling that the tightness in the labor market is unlikely to fall off a cliff but rather continue downward on a bumpy path," Oxford Economics wrote in a note on Wednesday. "While there are some concerns over the veracity of the JOLTS survey due to historically low response rates, the upshot remains that labor market strength remains robust.

Stocks ticked lower on the news, with the major indices hitting their lowest levels of the day following the JOLTS release.

Wall Street will turn its focus to the May jobs report next. The report, scheduled for release Friday, is expected to show 195,000 nonfarm payroll jobs were added to the US economy last month, with the unemployment rate ticking slightly higher to 3.5%, according to data from Bloomberg. In April, the US economy added 253,000 jobs while the unemployment rate fell to 3.4%, its lowest level since 1969.

Economists at Citi have indicated that any nonfarm payroll number at 200,000 or higher would likely indicate the labor market is still too resilient and push the Fed to hike interest rates in June.

MIAMI, FLORIDA - MAY 05: A 'Now Hiring' sign posted on the window of a business looking to hire workers on May 05, 2023 in Miami, Florida. A report by the Bureau of Labor Statistics showed the US economy added 253,000 jobs in April.  (Photo by Joe Raedle/Getty Images)
MIAMI, FLORIDA - MAY 05: A 'Now Hiring' sign posted on the window of a business looking to hire workers on May 05, 2023 in Miami, Florida. A report by the Bureau of Labor Statistics showed the US economy added 253,000 jobs in April. (Photo by Joe Raedle/Getty Images) (Joe Raedle via Getty Images)

Josh is a reporter for Yahoo Finance.

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