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A job posting is up at a restaurant in Arlington Heights on Friday.
AP

WASHINGTON — The number of job openings in the U.S. rose slightly in May to 8.1 million, despite the impact of higher interest rates meant to cool the labor market.

Job openings rose from a revised 7.9 million in April, the first reading below 8 million since February 2021, the Labor Department reported Tuesday. April job openings were marked down from an originally reported 8.1 million.

Layoffs rose to 1.65 million in May, from 1.54 million in April. The number of Americans quitting jobs — a sign of confidence in their prospects — remained basically unchanged.

“The report was another sign that the labor market is holding up… The expansion looks solid,” said Robert Frick, an economist at Navy Federal Credit Union.

The U.S. economy and labor market have been remarkably resilient in the face of the Federal Reserve’s campaign to raise interest rates to keep inflation in check. The Fed raised its benchmark rate 11 times in 2022 and 2023, hitting a 23-year high.

Despite expectations of a recession, the US economy continued to grow and employers continued to hire.

But lately, there have been signs that the economy is losing steam. The number of job openings has been steadily declining since peaking at 12.2 million in March 2022. The labor market is still strong. There are 1.25 jobs for every unemployed American, but that’s down from a ratio of 2 to 1 in January 2023.

Fed policymakers are happy about the drop in job openings, saying it’s a relatively painless way to cool an overheated labor market and reduce pressure on businesses to raise wages, which can fuel inflation.

From January through March of this year, the economy grew at an annual pace of just 1.4%, the weakest level since spring 2022. Consumer spending, which accounts for about 70% of U.S. economic activity, rose just 1.5% after expanding more than 3% in each of the last two quarters of 2023.

The Labor Department is expected to report Friday that employers added 190,000 jobs last month, down from 272,000 in May, according to a survey of forecasters by data firm FactSet. The unemployment rate is expected to remain low at 4%.

High interest rates have helped push inflation closer to the Fed’s 2% annual target, from a 40-year high of 9.1% in June 2022. Progress in curbing price increases is expected to allow the central bank to cut rates. Wall Street investors are expecting the first rate cut at the Fed’s September meeting.

Speaking at a conference in Portugal on Tuesday, Fed Chairman Jerome Powell said progress toward lower inflation appeared to have resumed after stalling earlier this year. But he said the Fed needed more evidence before cutting rates.

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AP Business Writer Matt Ott contributed to this story.