Michelle ThompsonIn October, the number of “Now Hiring” signs was not as abundant as it had been in recent years, and more workers opted to remain in their current positions.
According to data released by the Bureau of Labor Statistics on Tuesday, there were approximately 8.7 million open job positions during the month.
The data from the BLS indicates that there are roughly 1.3 job openings for every unemployed person.
This marks the lowest number of job openings recorded in a month since March 2021 and serves as additional evidence of a moderating U.S. labor market, as indicated in the Bureau of Labor Statistics’ October Job Openings and Labor Turnover Survey report.
October’s count is notably lower than the peak of 12.03 million job openings observed in March 2022 and is nearing the approximately 7 million openings reported before the onset of the pandemic.
The robust phase of the U.S. labor market, characterized by substantial job growth, abundant opportunities, and workers seeking better prospects, seems to be reaching its conclusion.
Karin Kimbrough, the chief economist at LinkedIn, described the current situation as a shift towards a cooling labor market, stating, “Now we’re starting to head back to levels that are truly consistent with what you would call a cooling labor market.”
Despite two consecutive months of Job Openings and Labor Turnover Survey (JOLTS) reports exceeding expectations, the latest figures fell significantly short of projections. Economists had anticipated October’s job openings to reach 9.3 million, according to Refinitiv consensus estimates.
Both employers and employees are displaying a heightened sense of caution.
The Federal Reserve has been hoping for a more relaxed labor market to aid its efforts to combat inflation. When there’s an imbalance between the supply and demand for workers, it can lead to wage increases, which in turn may prompt companies to raise prices.
In recent months, there has been a gradual slowdown in job growth, with the United States adding only 150,000 jobs in October, marking the second-lowest monthly increase since 2021.
Karin Kimbrough noted, “I think this reflects some caution on the part of employers. They’ve been exercising caution in terms of hiring, and now we can see it in the slower pace of job openings.”
Most industries have witnessed a reduction in available job positions, with some of the most significant declines occurring in the financial activities and retail sectors. Additional labor turnover indicators are indicating a slight relaxation in the labor market, as reported in Tuesday’s JOLTS report. The number of new hires decreased from 5.9 million to 5.89 million, while quits declined from 3.65 million to 3.63 million. Conversely, layoffs saw a slight increase, rising from 1.61 million to 1.64 million.
Monthly estimates can exhibit considerable fluctuations, but economists have been closely monitoring the trend in voluntary quits as an indicator of employees’ comfort and willingness to change jobs.
A decline in the number of people voluntarily leaving their jobs could suggest that individuals are becoming less confident about the state of the economy, potentially foreshadowing a further slowdown in wage growth.
It appears that employees are opting to stick with their current employers and positions, exhibiting a degree of caution. As Karin Kimbrough put it, “Employees are reading the room; they recognize that they might be better off to dance with the one that brought you. They’re definitely uncertain, and this uncertainty is actually starting to match the cautious stance that employers were already taking.”
She also noted, “Workers are also realizing that this is a different economy,” indicating a shift in the employment landscape.
Expect to See More Job-Related Data in the Future.
The net job gains reported in the monthly jobs report, scheduled for release this Friday, might conceal some of the detailed hiring and separations that take place each month. Hence, Tuesday’s JOLTS report serves as a valuable tool for providing a more comprehensive view of hiring activity, as noted by Wells Fargo economists Sarah House and Michael Pugliese.
They stated, “The hiring rate has declined from its pandemic peak in a sign that demand for new workers has softened, and the hiring boom needed to replace departing workers has slowed.”
The consensus estimate is that the U.S. economy added 180,000 jobs last month, according to Refinitiv. This net gain, while aligning with strong job growth seen before the pandemic, falls considerably short of the rapid job gains experienced in the past three years.
Tuesday’s JOLTS report marks the beginning of a series of labor market reports expected this week, including updates on private-sector hiring, jobless claims, job cuts, culminating with the November jobs report to be released on Friday.
