In November, the demand for workers hit its lowest point in over two and half years, according to the latest report published from the US Labor Department. Both hiring and layoffs decreased during this period. The Job Openings and Labor Turnover Survey by the department revealed that employment listings slightly dropped to 8.79 million, aligning with the Dow Jones Estimate of 8.8 million. This is the lowest figure since March 2021. Despite a decrease of 62000 in job openings, the rate of vacancies relative to employment remained constant at 5.3%.
Apart from the modest decrease in job openings, hiring also saw a decline of 363,000, bringing the rate down to 3.5%. a 0.2 percentage point decrease. Layoffs decreased by 116,000, and the rate remained steady at 1%. In a report last month, the Labor Department indicated a net increase in nonfarm payrolls of 199,000 for November. A report scheduled for this Friday is anticipated to show a growth of 170,000.
The job market’s ratio of job openings to available workers has decreased to 1.4 to 1, which, while still relatively high, is a significant drop from the 2 to 1 level seen in 2022. This shift reflects the progress made as companies navigate the supply and demand challenges that arose in the aftermath of the Covid pandemic, moving towards a more normalized state.
Specifically, job openings in transportation, warehousing, and utilities declined by 128,000, and the leisure and hospitality sector experienced a decrease of 97,000 openings. On the positive side, wholesale trade saw an increase of 63,000, and financial activities grew by 38,000.
The Federal Reserve closely monitors the JOLTS report for insights into the labor market’s health. The job market had been historically tight, contributing to higher inflation that reached a more than 40-year peak in mid-2022. However, there has been a gradual decline in inflation since then. In December, policymakers indicated that if this trend continues, they are likely to start a gradual reduction in interest rates this year.