The Labor Department reported Wednesday that the number of job openings remained steady at the end of November, suggesting the labor market has returned to normal after nearly four years of dislocation from the COVID-19 pandemic.
The number was up slightly from 8.7 million last month, but job openings are projected to reach 12 million in early 2022, in line with demand slowing from the rapid pace of the past two years. However, economists do not keep a lot of stock in a month. Based on job openings data, the report serves to measure how much slack there is in the labor market and particular sectors of the economy.
Vacancies in transportation, warehousing and utilities decreased by 128,000, and in the federal government, where the decline was 58,000. Openings in wholesale trade increased by 63,000.
Overall hiring declined by 363,000, with the professional and business services category falling by 163,000.
The report is the group's first to be released this week measuring the health of the job market. On Thursday, private payroll firm ADP will release its monthly survey of employers for December, and the week will conclude with the government's monthly report on non-farm payrolls on Friday. It is expected to show that about 170,000 jobs were created last month, down from 199,000 in November.
political cartoon on economy
Gregory Daco, chief economist at EY, said, "We expect the year to end on a strong note with solid payroll gains of 185 thousand, private sector job growth reaching 175 thousand and government employment rising 'only' 10 thousand. There will be an increase of thousand." “Thus, the economy would have added 2.74 million jobs in 2023, or the equivalent of about 230K jobs per month, which represents the strongest annual job gain since 2015, outside of the pandemic shock. It would also represent nearly 40% stronger job growth than 2019!”
Julia Pollack, chief economist at online job search site ZipRecruiter, says "online job posting data has seen a significant decline" and she expects that trend to continue in the first quarter.
“In the last six months, 98% of the jobs have come in three sectors, health care, leisure and hospitality, and government,” says Pollack.
This reflects the changing conditions in the economy.
"There are interest rate sensitive industries and those that are relatively immune to high borrowing costs". "People are traveling a lot, going to concerts and sporting events."
Later on Wednesday, the Federal Reserve will release the minutes of its December meeting, in which it kept interest rates steady, followed by a press conference from Chairman Jerome Powell, notable for his "passive" stance on further rate hikes. Was. Since then, the market has cut interest rates to some extent this year.
The minutes may provide some insight into why Powell was so positive about the downward trend of inflation as well as show whether his position was in line with other Fed officials.
"The job market is cooling, as evidenced by the low number of vacancies," said Jeffrey Roach, chief economist at LPL Financial. “We should see confirmation of this in this Friday's jobs report. Important metrics to track this coming Friday include the flow of individuals entering the labor force and the ratio of part-time workers to full-time workers. The Fed is likely to be in a good position as they prepare the market for an upcoming rate cut.