According to data released by the U.S. Department of Labor on Wednesday, November 30, job openings in the United States fell in October, reversing the unexpected upward trend in the previous month. Some market analysts believe that this is a promising sign for the Federal Reserve , which seeks to curb the demand of the entire economy.
Labor Department 1 Job Vacancy and Labor Movement Survey (JOLTS) released on Wednesday showed that job vacancies across the United States decreased from 10.7 million a month ago to 10.3 million, which roughly matched the median market forecast.
The report shows that market demand for labor is slowing, although still strong, amid the bleak economic outlook and rising interest rate . Even so, many employers are working hard to fill the vacancies. Labor force participation rates are lower than pre-epidemic levels, and enterprises continue to raise wages to attract and retain workers.
market analysis believes that the continuous mismatch between supply and demand in the labor market may last for a considerable period of time, which has led many economists to predict that even if consumer spending decreases, companies will try to recruit people first to stabilize workers.
Economic uncertainty coupled with recent layoff announcements from several major companies also seem to make Americans even less willing to leave their current positions. The turnover rate of voluntary resignations, which measures the total number of employed people, fell to 2.6%, the lowest level since May 2021, with the number of voluntary resignations in October at about 4.026 million, a decrease of 34,000 from September.
From the industry perspective, the largest reduction in vacancy positions was state and local governments (excluding the education department), with a total of 10,100 reductions; the non-durable goods manufacturing industry reduced 95,000 vacancies; and the federal government reduced 61,000 vacancies. The industry where vacancies increased was mainly the service industry, with 76,000 vacancies added; the financial and insurance industry increased by 70,000.
Although job openings reversed the recent rebound trend, the number of hiring continued to decline, The U.S. Bureau of Labor Statistics reported in September that the total number of hiring fell to 6.012 million, the lowest level since January 2021.
The ratio of job openings to unemployed people fell to 1.71 in October, the lowest in a year; the ratio in September was about 1.86. US financial blog Zero Hedge believes that this trend means that the ratio is expected to drop to the level of around 1.2 before the epidemic.
Federal officials closely monitor this ratio. The Fed has always hoped to avoid large-scale unemployment while cooling the economy and controlling inflation, that is, achieving a "soft economic landing."
In addition, the reduction in job openings means that vacancies are still 4.275 million more than unemployed workers.
Bloomberg Economic Research Institute analyzed:
October JOLTS data provided an important signal that the labor momentum is cooling - a way to cool down by the Federal Reserve. The market demand for workers is slowing, although it is slow, and layoffs remain extremely low. However, this momentum will be difficult to maintain.
The market expects that the non-farm employment data released on Friday will add 200,000 new jobs in November, the unemployment rate in the United States will remain at 3.7%, and the growth rate of hourly wages will slow down.
ADP employment data released earlier on Wednesday also showed a cooling trend in the U.S. labor market. The data shows that U.S. companies added 127,000 jobs this month, the lowest level since January 2021.
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