The number of job vacancies in January reached the lowest level since March 2021, showing further signs of a realignment in the labor market.
There were 8.86 million job openings at the end of January, a slight decline from the 8.89 million job openings in December, according to new Bureau of Labor Statistics data released Wednesday. Economists surveyed by Bloomberg had expected 8.85 million openings in January.
The report also showed that the churn rate, a sign of confidence among workers, fell to 2.1% from 2.2% the previous month, reaching its lowest level since August 2020. Additionally, the Job Openings and Labor Turnover Survey (JOLTS) showed. There were 5.7 million new hires this month, down slightly from December's 5.8 million.
The hiring rate was 3.6% in January. In summary, Oxford Economics' lead U.S. economist Nancy Vanden Houten described Wednesday's report as “consistent with a labor market that is still quite strong.”
The release comes as Federal Reserve Chairman Jerome Powell testifies on Capitol Hill. Powell described the labor market as “relatively tight” but noted that “supply and demand conditions have continued to become more balanced.”
Elsewhere on Wednesday, the ADP Research Institute's monthly Pay Insights report showed that wage gains for people changing jobs rose in February for the first time since November 2022.
ADP chief economist Nela Richardson told Yahoo Finance this was notable because wage increases for job changers are “most sensitive to current labor market activity.” Richardson added that the figure shows that massive wage growth during the pandemic “is not going to sleep quietly.”
“[Wages] “Actually show that labor market tensions are still widespread,” Richardson said.
But there were other signs on Wednesday that could suggest wage growth is slowing, which many believe would be a welcome sign in the fight against inflation. Liz Young, head of investment strategy at SoFi noted on X These layoffs tend to boost wage growth by about nine months. So the drop in quit rates observed in the January JOLTs report points to “further wage slowdown.”
The story goes on
A further update on wages will come with the February jobs report, scheduled for release Friday at 8:30 a.m. ET. Economists polled by Bloomberg expect wages rose 4.3% in February, compared with 4.5% in January. Broadly speaking, economists forecast that 200,000 jobs were added to the U.S. economy while the unemployment rate remained steady at 3.7%.
A “Hiring Now” sign is posted outside Taylor Party and Equipment Rentals in Somerville, Massachusetts, on September 1, 2022. (Brian Snyder/Portal) (Portal / Portal)
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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