Job openings fall to lowest level in nearly three years
Zachary Halaschak
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The number of job openings in the United States decreased by 52,000 to 8.8 million in November, the lowest that number has been in more than two years.
The new numbers, including openings across all sectors for that month, were released as part of the Job Openings and Labor Turnover Survey, which was updated by the Bureau of Labor Statistics on Wednesday.
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The monthly decline was small but still came as a surprise to economists and could be a sign that the labor market is beginning to soften under the weight of the Federal Reserve’s high interest rates.
“Net, net, the labor market looks to be coming in for a soft landing with job openings on a downward trajectory that is sure to please Fed officials as they plot their course on interest rates this year,” said Chris Rupkey, chief economist at FWDBONDS. “Layoffs have not led to recession magnitude unemployment yet, and the lack of job openings is not a factor apparently.”
About 3.5 million workers quit their jobs in November, little changed from the month before. The figure is equivalent to about 2.2% of the workforce.
The “quits rate” measures the share of people who voluntarily left their jobs and includes those who left their previous employment for another job and people who quit but are confident they will soon find new employment, given the tightness in the labor market.
Also of note in Wednesday’s JOLTS report, layoffs and discharges were little changed at 1.5 million in November.
For context, monthly job openings peaked in March 2022, the first month the Fed hiked interest rates, at over 12 million, so the most recent numbers mark a 27% decline from that time.
The labor market has remained strong despite the Fed’s rate hikes, which began in earnest back in March 2022. The economy broke expectations again in November and added nearly 200,000 jobs. The unemployment rate also dropped slightly to 3.7%, right around where it was in the months before the pandemic.
Because of the recent progress in bringing down inflation, the Fed is now eyeing a pivot to cutting rates. The central bank has held interest rates where they are since July but now appears to be on the verge of cutting, with the first cut expected as soon as March.
Fed officials, while stressing that they could still raise rates even more if inflation proves too sticky, have penciled in three rate cuts next year, although investors think there will be up to six downward revisions.
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Economic growth has also proven solid despite the higher rates.
Gross domestic product expanded at a 4.9% seasonally adjusted annual rate in the third quarter of this year — the strongest growth since the country’s pandemic rebound. GDP growth was 2.1% in the second quarter and 2.2% in the first quarter of this year. The Atlanta Fed’s “GDP Now” tracker predicts that GDP growth in the final quarter of this year will be 2%.