The numbers: The number of job openings fell to a 32-month low of 8.8 million in November, another sign that an ongoing U.S. hiring boom in response to higher interest rates is easing.
The number of job openings fell from a revised 8.9 million in October, the Labor Department said Wednesday.
Many open positions are never actually filled, but the trend in job postings provides an indication of the health of the labor market and the overall economy. The number of job vacancies has steadily declined from a record 12 million in 2022.
Federal Reserve officials see lower job vacancies as evidence that higher interest rates are slowing the economy and curbing appetite for workers. The hope is that a laxer labor market will also dampen wage growth and make inflation easier to control.
The number of layoffs also fell to its lowest level in 33 months and amounted to 3.5 million. The fact that fewer people are quitting their jobs is also a sign that the labor market is weakening.
The number of people quitting their jobs rose to a record 4.5 million last year.
Important details: Job openings fell the most in transportation and the federal government. The biggest increase was in wholesale.
The number of vacancies per unemployed worker remained unchanged at 1.4. The ratio has fallen from a peak of 2.0 in 2022 and has almost returned to a pre-pandemic standard of about 1.2.
Fed officials had been closely watching the ratio as an indicator of labor market strength.
The US is forecast to add 170,000 new jobs in December. The jobs report will be published on Friday.
Big picture: The job market is like a big hot air balloon with a small teardrop. It is still quite robust, but is gradually losing air and altitude.
But as long as the rift doesn't become more widespread – think hiring freezes and large layoffs – the job market should remain strong enough to keep the US out of recession.
What you say: Today [job openings] “Data is another signal that the Fed is going for a soft landing,” said Ron Temple. Chief Market Strategist at Lazard.
“The signs still point to steady job growth this year, which means there is 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 trading.