The US job market remains strong and workers are still in demand, according to newly released labor data. However, there are plenty of indications that activity continues to cool.
The number of available jobs in the United States unexpectedly rose in December to an estimated 9.026 million, according to seasonally adjusted Bureau of Labor Statistics data released Tuesday.
It’s the first time openings popped above 9 million since September, and outpaces November’s upwardly revised tally of 8.925 million, according to BLS’ monthly Job Openings and Labor Turnover Survey (JOLTS) report. Economists had expected a total of 8.714 million, according to FactSet consensus estimates.
“We’re back over the 9 million mark, which is a three-month high, and the bulk of the gains were in the private sector,” Jennifer Lee, senior economist with BMO Capital Markets, wrote in a note issued Tuesday. “So the good news is that there are options out there — if one is still unemployed or is looking for extra work. The bad news is that it means that the consumer could spend more, and that’s not what the Fed wants right now.”
What the Fed wants to see
The Federal Reserve, which will announce its latest policymaking action on Wednesday, has been hoping to see more slack in the labor market to help in the central bank’s fight to bring down inflation. When there’s an imbalance in the supply and demand for workers, it could cause wages to rise and, in turn, prompt companies to raise prices.
In recent months, Fed Chair Jerome Powell has remarked that the labor market has remained robust but in better balance than it had during the throes of the pandemic recovery. At one point in early 2022, job openings soared north of 12 million.
However, while the BLS noted that other metrics in the JOLTS report “changed little” from the month before, the trajectory of the data paints a picture of a solid, but slowing, labor market.
“We’re all trying to figure out whether we’re going to manage a soft landing [of tamed inflation without significant job losses],” Fiona Greig, global head of investor research and policy at Vanguard, told CNN on Tuesday. “There’s no doubt that the level of openings are still exceeding pre-pandemic times [of 7 million]. The labor market isn’t as tight as, say, a year ago; but it is still strong.”
Employees are staying put
The number of new hires bounced up to 5.621 million after having fallen the month before to some of the lowest levels seen in years.
In November, the rate of hires as a percentage of total employment was 3.5%. Outside of the initial stages of the pandemic, that was the lowest hires rate since 2014.
In December, layoffs increased to 1.616 million from 1.531 million the month before and remain still well below pre-pandemic averages.
However, employees appear may be feeling more reticent about jumping ship or not seeing as many opportunities: The number of quits dropped to 3.392 million, the lowest level since January 2021.
Employee confidence is waning amid a pullback in hiring and headline-making mass layoffs in sectors such as tech, media and transportation, according to research released earlier this week by Glassdoor. Its employee confidence index dropped in January to a record-low 45.6%. (Glassdoor established the index in 2016).
“This is a reflection of increasing fear around job security among employees,” Daniel Zhao, Glassdoor’s lead economist, told CNN in an interview earlier this week.
JOLTS is one of several key labor market reports to land this week, capping off with the closely watched monthly jobs report Friday morning.
