Job Openings in the U.S. Fall to Lowest Level Since January 2021

As a significant change, the U.S. labor market has shown signs of cooling, with job openings declining to their lowest level since January 2021. According to the latest Job Openings and Labor Turnover Survey (JOLTS) published by the Bureau of Labor Statistics on Tuesday, job openings fell by 418,000 to 7.443 million at the end of September. This drop in labor demand indicates a notable softening of conditions in the labor market.

Revised data for August also showed a decline in job openings; the previously reported figure of 8.040 million was adjusted downward to 7.861 million. The September figures fell short of economists’ expectations, who had predicted 8.00 million job openings.

Despite the decrease in job openings, the number of hires increased, rising by 123,000 to reach 5.558 million. At the same time, layoffs also climbed, with an additional 165,000 layoffs reported, bringing the total to 1.833 million.

External factors such as hurricanes and strikes are expected to temporarily cloud the labor market outlook. Predictions for October anticipate that non-farm payroll growth will be the lowest in six months at 115,000. The unemployment rate is expected to remain steady at 4.1%.

In response to these labor market conditions, Federal Reserve officials are expected to overlook the upcoming October employment report in their meetings. A 25 basis point cut in interest rates is anticipated, following a significant half-point reduction in September that initiated a loosening cycle. This previous cut had lowered the Fed's policy rate to a range of 4.75%-5.00%. The Fed had raised interest rates a total of 525 basis points to control inflation throughout 2022 and 2023.