The numbers: Job openings fell in November to a 32-month low of 8.8 million in another sign that a prolonged U.S. hiring boom is fading in response to higher interest rates.
Job listings slid from a revised 8.9 million in October, the Labor Department said Wednesday.
Many openings are never actually filled, but the trend in job postings gives clues on the health of the labor market and the broader economy. Job openings have declined steadily from a record 12 million in 2022.
Federal Reserve officials views a smaller number of openings as evidence that higher interest rates are slowing the economy and curbing the appetite for labor. The hope is that a more lax jobs market will also temper the growth in wages and make it easier to control inflation.
The number of people quitting jobs, meanwhile, also dropped to a 33-month low of 3.5 million. Fewer people quitting jobs is also a sign of a softening labor market.
Job quitters had climbed last year to a record 4.5 million.
Key details: Job openings fell the most in transportation and the federal government. The biggest increase was in wholesale businesses.
The number of job openings for each unemployed worker was flat at 1.4. The ratio is down from a peak of 2.0 in 2022 and almost back to a prepandemic norm of around 1.2 or so.
Fed officials had been watching the ratio closely as a gauge of labor-market strength.
The number of people hired in November, meanwhile, dropped to 5.5 million to mark the smallest increase since April 2020 That’s when the pandemic induced a shutdown of the U.S. economy.
The U.S. is forecast to add 170,000 new jobs in December. The jobs report comes out on Friday.
Big picture: The labor market is like a big hot-air balloon with a small tear. It’s still quite robust but starting to lose air and altitude.
Yet unless the tear spreads — think hiring freezes and major layoffs — the jobs market is likely to stay strong enough to keep the U.S. out of recession.
What they are saying: Today’s [job openings] data is another signal that the Fed is delivering a soft landing,” said Ron Temple. chief market strategist at Lazard.
“Signs still point to steady jobs growth this year, in line with no recession,” said Robert Frick, corporate economist at Navy Federal Credit Union.
Market reaction: The Dow Jones Industrial Average
DJIA
and S&P 500
SPX
fell in Wednesday trades.
Read the full article here
