US Job Openings Hit New Low Amid Slowdown

Higher interest rates are reducing worker demand and increasing financial markets’ predictions that the Federal Reserve’s monetary policy tightening cycle is done, as seen by the 2-1/2-year low of U.S. job vacancies in October. There were 1.34 job openings for every jobless person in October, according to the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) data. This is the lowest ratio since August 2021 and decreased from 1.47 in September. The resignation rate is falling, which bodes well for the future of pay inflation.

Following last week’s statistics showing inflation easing in October, there was a larger-than-expected drop in unfilled positions. As a result of a string of data favorable to inflation, the financial markets are expecting a rate drop as soon as March of next year. According to Rubeela Farooqi, chief U.S. economist at High Frequency Economics, policymakers would find these statistics quite encouraging. On Wednesday, the Federal Reserve is anticipated to keep interest rates steady.

The transportation, warehousing, utilities, health care, and social support industries all saw rises in layoffs in October, bringing the total to a still-low 1.642 million, signaling a slow but steady improvement in the labor market. At 1.0%, the layoff rate remained constant. Reducing job openings has a significantly more significant impact on lowering the surplus labor demand than a rise in the unemployment rate.

Following a contraction in May, employment in the services sector increased for a sixth month in November, according to separate data from the Institute for Supply Management. For the eleventh month, the ISM’s total services PMI has increased, rising to 52.7 in November from 51.8 in October. But company feedback was all over the map. “Signs of recovery are on the horizon,” according to enterprises in the healthcare and social assistance sectors, while the accommodation and food services industries anticipated a “pick up again” in restaurant sales and traffic patterns in December.

With the return of around 33,000 striking United Auto Workers union members, nonfarm payrolls climbed by 185,000 jobs in November, according to the government’s scheduled report on Friday. In October, payrolls saw a rise of 150,000 employees.

Predictions for November’s employment total would fall short of the 258,000 monthly gains seen over the last 12 months. A recession is very improbable, even if the economy shows signs of weakening in the fourth quarter. Most experts predict moderate growth following the economy’s 5.2% annualized growth rate in the third quarter.