Last Updated on December 6, 2023 by Robert C. Hoopes
Job Openings Hit Lowest Point in 2½ Years, Signaling Potential Softening in Labor Market
October saw a significant decline in job openings, reaching their lowest point in 2½ years, according to the latest data from the Labor Department. The decline of 617,000 job openings, or 6.6%, brought the total to 8.73 million, well below the Dow Jones estimate of 9.4 million and the lowest since March 2021.
The decrease in job vacancies has resulted in a decrease in the ratio of openings to available workers, which now stands at 1.3 to 1. This decline is being closely watched by Federal Reserve policymakers for any signs of labor slack.
However, while job openings experienced a significant decline, the total number of hires only saw a slight decrease. Additionally, layoffs and separations increased modestly. Quits, which are seen as a sign of worker confidence, remained relatively unchanged but have decreased from the peak of the so-called “Great Resignation.”
The decline in job openings was observed across multiple industries, with the biggest drops seen in education and health services, financial activities, leisure and hospitality, and retail. These sectors have been particularly impacted by the ongoing labor shortage.
The release of this data, known as the Job Openings and Labor Turnover Survey (JOLTS), comes ahead of the Labor Department’s nonfarm payrolls count for November. Economists anticipate that this report will show an increase of 190,000 jobs.
The decline in job openings may come as a relief to Federal Reserve officials, who have been closely monitoring the hot job market as a potential concern for inflation. The Federal Open Market Committee is expected to leave interest rates unchanged in its upcoming policy meeting next week.
On a positive note, the Institute for Supply Management (ISM) services index for November indicated expansion in the share of companies reporting growth. The index showed gains in inventory sentiment, inventories, and new export orders. Employment also saw a slight increase, offering some optimism for the labor market.
As the labor market continues to evolve, it will be crucial for job seekers and employers to stay updated on the latest trends and developments. For MBA graduates and professionals, understanding the shifting landscape will be vital for navigating their careers in this dynamic environment.