On Tuesday, December 9th, the U.S. Department of Labor released the latest Job Openings and Labor Turnover Survey (JOLTS) report. The data showed that in October, employers posted 7.667 million job openings, slightly higher than September’s 7.66 million, indicating that amid continued economic uncertainty, businesses remain cautious in their hiring and investment intentions.
The report, delayed due to the federal government shutdown, combined the previously missing September data with the October data in this report. The data revealed a significant increase in job openings from 7.23 million in August, but still well below the post-pandemic high of 12.1 million in March 2022.
The report highlighted that layoffs in the U.S. surged to nearly 1.9 million in October, marking the highest level since January 2023. Additionally, voluntary quits decreased, signaling a notable decline in confidence in the labor market.
Samuel Tombs, Chief U.S. Economist at Pantheon, wrote in a commentary that the decrease in the quit rate suggests that “firms are being forced to resort to active job cuts to control labor costs, thereby boosting future unemployment rates, rather than relying on natural attrition.”
Since reaching a record 12.1 million job openings in March 2022, the number of job vacancies has declined for two consecutive years. The cooling of the job market is partly attributed to the Federal Reserve’s high-interest-rate policies implemented in 2022 and 2023 to address inflation. While the rate hikes effectively controlled inflation, they also slowed down companies’ hiring plans.
This week, the Federal Reserve will hold a meeting to decide whether to cut the benchmark interest rate. This meeting is expected to be particularly intense. Faced with multiple challenges such as slowing economic growth, inflation pressure, and financial stability, internal debates within the Fed on whether to continue cutting rates to stimulate the economy or maintain a hawkish stance to prevent inflation from rebounding may intensify, especially when considering employment, inflation data, and global economic risks.
Currently, the inflation rate remains above the Fed’s 2% target. High inflation typically hinders rate cuts, but on the other hand, the recent weakness in the labor market may compel the Fed to make a third rate cut this year.
The 43-day federal government shutdown has led to delays in the release of various economic statistics. The Labor Department stated that the October unemployment rate could not be published on time, and some October employment data will be released along with the full November report, expected to be 11 days later than originally scheduled.
According to economists at data company FactSet, job growth in the U.S. in November is likely to be less than 38,000, and the unemployment rate is expected to edge up from 4.4% in September to 4.5%, although still below historical average levels, it would be the highest level in nearly four years.