The number of job openings in the United States decreased to 8.7 million in October, the lowest that number has been in more than two years.
The new numbers, which include openings across all sectors for that month, were released as part of the Job Openings and Labor Turnover Survey, which was updated by the Bureau of Labor Statistics on Tuesday. The decrease is notable and marks the lowest level of job openings since March 2021.
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The monthly decline was much sharper than most economists had anticipated and could be a sign that the labor market is starting to soften a bit under the weight of the Federal Reserve’s high interest rate target. Still, there were some notable positives in the report, according to Nick Bunker, Indeed Hiring Lab’s director of economic research.
“While the number of job openings declined, hiring remained largely unchanged, a sign that the labor market isn’t falling off a cliff,” he said. “A decline in openings without a spike in layoffs represents a relatively painless rebalancing between labor supply and labor demand. Yet hiring demand remains robust even with the large decline in October, and openings are up 22% from pre-pandemic levels.”
“It is no longer a moderating labor market: It is a market that has moderated,” Bunker added.
The largest decreases in job openings were in healthcare and social assistance, finance and insurance, and real estate and rental and leasing.
About 3.6 million workers quit their jobs in October, little changed from the month before. The figure is equivalent to about 2.3% of the workforce.
The "quits rate" measures the number of people who voluntarily left their jobs and includes those who left their previous employment for another job and people who quit but are confident they will soon find new employment, given the tightness in the labor market.
Also of note in Tuesday’s JOLTS report, layoffs and discharges were little changed at 1.6 million in October.
The most recently released employment numbers from October showed the economy added 150,000 jobs that month, fewer than most economists had projected, although still a positive gain. The unemployment rate is now 3.9%.
All eyes will be on November’s jobs report, which is set to be released on Friday. The consensus among economists is that the economy added some 180,000 jobs and that the unemployment rate will remain unchanged.
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The Fed has been hiking interest rates since March 2022, although there have been recent indications and remarks from Fed officials that the rate increases might be done for this tightening cycle. The central bank’s target rate is now 5.25% to 5.50%.
“The Fed is done with rate hikes. Bet on it,” said Chris Rupkey, chief economist at FWDBONDS. “JOLTS reinforces our view that the Fed’s rate hikes are over and the peak rates for this cycle will be 5.5% when it comes time to write the history books on the worst outbreak of inflation, the biggest policy mistake made by the central banks since the 1980s. Inflation was transitory and it looks like job openings were too.”