Job Openings Fall, Reinforcing Fed's Cautious Rate Hike Stance
January 10, 2023
Bensenville, Illinois - The labor market cooled in December, with job openings declining more than analysts anticipated. The latest data from the Bureau of Labor Statistics shows a decrease from 8.15 million to 7.6 million job openings, marking the largest sequential drop since October 2023.
Despite the decline, economists maintain a positive outlook. Nancy Vanden Houten, lead US economist at Oxford Economics, noted that the labor market remains healthy, with low layoffs and steady net job growth.
JOLTS Survey Highlights
The Job Openings and Labor Turnover Survey (JOLTS) revealed an increase in hires to 5.46 million, up from 5.37 million in November. However, the hiring rate remained at 3.4% for the third consecutive month.
The quits rate, a measure of workers' confidence, held steady at 2% in December. Both the quits and hiring rates remain below pre-pandemic levels.
Fed's View
Fed Chair Jerome Powell has characterized the labor market as "broadly stable," justifying the central bank's pause in interest rate cuts. Vanden Houten believes the latest JOLTS report aligns with the Fed's assessment.
She highlights the uncertainty surrounding tariff policy and states that markets are currently pricing in a less than 50% chance of Fed rate cuts before June.
Upcoming Labor Market Reports
Investors will closely monitor additional key labor market reports this week, culminating in the January jobs report on Friday. Economists anticipate 170,000 new jobs, with the unemployment rate holding steady at 4.1%.