The number of job openings in the United States took a significant dive in December, falling to 7.6 million, according to the latest report from the U.S. Bureau of Labor Statistics. This sharp decline marks the lowest figure since September, undershooting market expectations and signalling potential shifts in the labour market.
As the labour market continues to navigate the post-pandemic landscape, this report highlights key changes in job availability, hiring trends, and employee turnover. The Federal Reserve, which closely monitors this data for signs of economic tightening or loosening, will be watching these figures for further indications of labour market health as 2024 progresses.
Significant Decline in Job Openings
The decline in job openings was considerable, with 556,000 fewer positions available compared to November, taking the total to 7.6 million. This represents a drop of 1.3 million compared to December 2023. Industries such as professional and business services, healthcare, and finance saw notable reductions in available jobs.
- Job openings decreased in key sectors:
- Professional and business services: -225,000
- Health care and social assistance: -180,000
- Finance and insurance: -136,000
- Job openings increased in the arts, entertainment, and recreation sector : 65,000
This downward trend suggests that the demand for workers, especially in these industries, may be cooling off, and employers could be reassessing their staffing needs as economic conditions shift.
Stability in Hiring and Separations
While job openings saw a sharp decline, the number of hires remained relatively stable in December, with 5.5 million new positions filled. Total separations, which include voluntary quits and involuntary layoffs, also showed minimal change. This stability in hiring is indicative of a labour market that remains active, albeit with a lower overall demand for workers.
- Key data on separations:
- Total separations: 5.3 million
- Quits: 3.2 million
- Layoffs and discharges: 1.8 million
Quits remained stable at 3.2 million, suggesting that employees are still willing to leave their jobs voluntarily, while layoffs and discharges showed little change, pointing to a relatively low level of involuntary job losses despite the dip in job openings.
This mix of stability in hiring and separations, coupled with the significant drop in available positions, suggests that while the labour market remains functional, the overall demand for workers may be on a downward trajectory.
The Federal Reserve is expected to pay close attention to how these trends interact with broader economic signals as they plan future monetary policy.
