The American labor market was on shaky ground in November, as job openings fell to 7.1 million. The hiring landscape continues to be challenging. Consequently, the net hiring rate has fallen back to its cycle low of 3.2%. December 13, 2023 In the latest Job Openings and Labor Turnover Survey (JOLTS), we see a labor market at best, many of its moving parts canceling each other out. Employers and workers alike are searching for certainty in an unpredictable economic atmosphere.
In November, the hiring rate decreased to 3.2%. This drop represents a return to the bottom rung of what’s been the longest economic cycle in U.S. history. This positive trend supports the idea that job openings remain substantial. Employers are skittish and not bringing on new employees nearly as quickly. This, in turn, might result in extended times of confusion for the matched job-seekers and their respective employers.
Additionally, the quit rate—the share of workers voluntarily walking off the job—added a tick up to 2.0%. That uptick comes on the heels of a positive revision in October’s numbers. Even with this increase, the quit rate is still close to an all-time low during the last ten years of data. That means many workers are still choosing security over a leap into new opportunities.
Taken with the data from November, this clearly adds fuel to the argument that the labor market is dealing with some major headwinds. Job openings are still very high, at 7.1 million, which means there are lots of paths to a new, better job. The stagnation in both hiring and quitting shows that employers and employees alike are waiting cautiously on the sidelines. For one, many workers might not be willing to trade away from where they’re at in an uncertain economy, preferring steadiness to risk. Where are Americans moving?
Economists and analysts have sounded alarms that the aforementioned trends signal a labor market in stasis over a burgeoning expansion. Steady job openings and decreased quit rates show that workers are being risk-averse. High inflation rates are making many anxious to preserve existing job security rather than pursue possible career-growing opportunities. We’re sure employers are tuning in to the need to change their hiring practices given these new realities.