The latest report from the Labor Department reveals that U.S. employers posted 8.7 million job openings in October, marking the lowest figure since March 2021. This decline, from 9.4 million in September, suggests a cooling in hiring amid higher interest rates. Although layoffs increased modestly in October, the number of Americans quitting their jobs, a reflection of confidence in finding better opportunities, was down slightly.
The drop in job openings was particularly notable in sectors such as healthcare and social assistance (down 236,000), finance (down 217,000), and hotels, restaurants, and bars (down 124,000). Despite this decrease, job openings remain historically high, surpassing 8 million for 32 consecutive months, a threshold not reached before 2021.
The overall U.S. hiring pace has slowed from the rapid growth seen in the past two years. However, employers have consistently added a solid average of 239,000 jobs per month in 2022. The unemployment rate has remained below 4% for 21 consecutive months, the longest such streak since the 1960s.
The November jobs report is expected to be released on Friday, with forecasts indicating an addition of nearly 173,000 jobs. The unemployment rate is anticipated to remain at 3.9%. Despite low unemployment, an increasing number of Americans (1.93 million) were collecting unemployment benefits in the week ending November 18, the highest figure in two years, suggesting longer periods of unemployment for those seeking new employment.
The combination of easing inflation and continued hiring resilience has fueled hopes for a “soft landing,” with the Federal Reserve managing rate increases to curb inflation without triggering a recession. The recent cooling in the job market could indicate a reduction in inflation pressures, potentially lessening the need for the Fed to maintain high-interest rates. Economists suggest that the data supports the view that rates may have peaked, with the possibility of a rate cut in 2024.