On Wednesday, the US Bureau of Labor Statistics (BLS) released its closely watched Job Openings and Labor Turnover Survey (JOLTS). The rosy news of declining job openings for November came as a surprise to many. According to the full report, 7.146 million job openings were available. This number is based on the last business day of the month. This last figure fell short of market expectations, which had predicted 7.6 million openings. It was a drop from October’s revised total of 7.449 million openings.
The JOLTS report is an incredibly important window into the labor market, helping us to better understand employment trends and workforce dynamics. The drop in job openings is likely a welcoming sign of a cooling labor market, plummeting as it’s been across the economy in general. The pace of hiring was unchanged this month. It’s not because employers are leaving the market—they’re just a lot less inclined to grow their workforce.
Job Openings Decline
Last month, the BLS made headlines with a record decline in job openings month over month. The overall number of openings is currently 7.146 million. That’s a decline of 29 percent since last year from October’s revised figure of 7.449 million, which had originally been reported as 7.67 million. This new downward adjustment illustrates the rapidly changing environment for potential employment in our country.
The drop in job openings really jumps out. It flies in the face of the expectations of most analysts who were looking for a much better job market. The expected number of 7.6 million job openings points to a better picture. This optimism has not proven true, leading to fears of upcoming economic downturns.
Stability in Hires and Separations
Yet, despite the drop in job openings, the report indicated the levels of hiring were basically steady. This relative hiring stability indicates that employers are even more skittish about adding to their payrolls with economic storm clouds gathering.
Total separations for November were similarly unchanged at 5.1 million. This headline figure includes both quits and layoffs, both of which it’s worth noting were overall reported to have held steady over the month.
“Over the month, hires were little changed and total separations were unchanged at 5.1 million each. Within separations, both quits (3.2 million) and layoffs and discharges (1.7 million) were little changed.” – US Bureau of Labor Statistics (BLS)
The level of quits increased by a marginal 3.2 million. Job openings fell, and layoffs and discharges became stable at 1.7 million, indicating the labor market remains generally well balanced even as the mix of jobs is shifting.
Implications for the Labor Market
The JOLTS numbers show there are still plenty of paths to find opportunities in this tight labor market. On the whole, employers are taking a wait-and-see attitude. A drop in job openings would indicate that employers are rethinking their hiring plans. Their ingenuity is helping them to thrive in a changed and changing economic environment.
The adjustment has come in part from the economic shocks brought by inflation and the pandemic-induced change of consumers going online. Consistent incoming and outgoing employees can serve as a cushion, mitigating the impact of future volatility. Employers could be waiting on their existing stock of workers while waiting for some clearer signals about what economic conditions might look like in the future.