Despite a minor decrease in job opportunities in January, the labor market remained tight, as evidenced by the vast gap between available workers and unfilled positions.
Approximately 10.824 million positions are available, down around 410,000 from December, according to the Job Openings and Labor Turnover Survey, or JOLTS, published by the Labor Department.
Labor Market Cools Down
With 5.13 million jobs unfilled, there are 1.9 opportunities for every worker that is available. In an effort to calm the job market and lower inflation, the Federal Reserve has been closely monitoring the total number of open jobs per available unemployed worker. This level was essentially constant at 1.9.
But, despite employers’ remarkable resiliency in the face of interest rate rises from the Fed, the decline in open positions is the most recent sign that the once-hot labor market is gradually cooling.
Job vacancies declined considerably in certain sectors that had shown surprising success, notably construction, where they dropped by 240,000.
There was somewhat less available employment in the leisure and hospitality industries, including restaurants and bars, which have been attempting to react to the relentless demand.
Read more: Michigan Senate: Taxpayers will not receive $180 relief checks
US Employment Situation
Officials from the Federal Reserve regularly monitor the JOLTS report as they develop monetary policy. Fed Chairman Jerome Powell described the labor market as very tight in talks on Capitol Hill this week and issued a warning that a recent flurry of data indicating increasing inflation pressures could cause interest rate hikes to be higher than anticipated.
Powell stated before the Senate Banking Committee on Wednesday that the JOLTS report is one important piece of information he will consider before deciding on interest rates at the policy meeting on March 21–22.
According to the JOLTS survey, companies hired a record-breaking 6.37 million people in October, the most since August.
While the number of quits, a measure of workers’ trust in mobility, decreased to 3.88 million, the lowest level since May 2021, the total separations remained largely unchanged. Nonetheless, layoffs increased significantly, rising 241,000 or 16%.
Construction openings decreased by 240,000, or 49%, which was one of the key signals of weakness. According to the ADP report, the trend continued into February, when the sector lost 16,000 jobs. In January, there were 194,000 fewer job postings available in the leisure and hospitality sector, which has led to job growth over the past two years or so.
When the Labor Department issues its nonfarm payrolls report on Friday, markets will have a more complete picture of the employment situation. According to economists surveyed by Dow Jones, payrolls will grow by 225,000 while the unemployment rate will remain at 3.4%.
Read more: China increases military spending by billions after US warns that Beijing may soon invade Taiwan
