Decline in job openings suggests a softer labor market

The largest decreases were in health care and finance positions
October: Openings fell 236K in health care and social assistance
November: 128K fewer open transportation, warehousing, utilities positions

Updated: Jan 3, 2024 / 02:55 PM CST

FILE – A hiring sign is displayed at a restaurant in Prospect Heights, Ill., on April 4, 2023. The hot jobs market has been defying a weakening economy and confounding the Federal Reserve for months, but now shows signs of cooling. The latest set of employment data from the government shows that job openings fell in March to their lowest level since April 2021. Layoffs rose to 1.8 million, their highest level since December 2020. (AP Photo/Nam Y. Huh, File)

(NewsNation) — Job openings fell in 2023, hitting a nearly three-year low in November as the labor market gradually cools, which could pave the way for the Federal Reserve to start cutting interest rates this year.

Job openings, a measure of labor demand, were down 62,000 to 8.790 million by the last day of November, the Labor Department’s Bureau of Labor Statistics said in its monthly Job Openings and Labor Turnover Survey, or JOLTS report. That was the lowest level since March 2021.

Data for October showed openings fell by 236,000 in health care and social assistance and dropped to 168,000 in finance and insurance. Notably, real estate and rental and leasing decreased by 49,000. However, information saw an increase of 39,000.

In November, there were 128,000 fewer open positions in the transportation, warehousing and utilities industries. Unfilled jobs fell by 58,000 in the federal government. But vacancies increased by 63,000 in the wholesale trade sector. The job vacancy rate was unchanged at 5.3%.

Hiring continued to lag, falling 363,000 to 5.465 million. The professional and business services sector reported a decline of 163,000. The hire rate dropped to 3.5% from 3.7% in October.

Resignations decreased from 157,000 to 3.471 million, the lowest level since February 2021. The drop was led by the professional and business services sector, where quits decreased 77,000.

The quits rate, viewed as a measure of labor market confidence, fell to 2.2% after holding at 2.3% for four straight months. A declining quits rate bodes well for slower wage growth and price pressures in the economy.

Attention now shifts to the release on Friday of the Labor Department’s December employment report, which is expected to show that nonfarm payrolls increased by 170,000 jobs in December, according to a Reuters survey of economists, after a rise of 199,000 in November.

The anticipated December job gain would be below the average monthly rise of 240,000 over the prior 12 months, but well above the roughly 100,000 needed per month to keep up with growth in the working-age population. The unemployment rate is forecast to edge up to 3.8% from 3.7% in November.

Reuters contributed to this story.