US job openings drop to lowest since 2020, layoffs edge up
Available positions decrease to 6.54 million from a downwardly revised 6.93 million reading in November
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[WASHINGTON] US job openings unexpectedly fell in December to the lowest level since 2020 and layoffs edged up, adding to evidence of sluggish demand for workers.
Available positions decreased to 6.54 million from a downwardly revised 6.93 million reading in November, according to Bureau of Labor Statistics data out Thursday (Feb 5). The latest figure was below all estimates in a Bloomberg survey of economists.
The pullback in openings was driven by professional and business services, as well as retail trade. The rise in layoffs reflected more cuts in transportation and warehousing. The number of hires also climbed but remained subdued.
The slide in vacancies indicates companies continue to be selective about their hiring tempo as they assess the size of their labour forces and economic activity. With the number of unemployed slightly exceeding openings, the figures also reinforce the Federal Reserve’s view that wage growth is not a source of inflationary pressures.
The Jolts report showed the number of vacancies per unemployed worker, a ratio Fed officials watch closely as a proxy of the balance between labour demand and supply, held at 0.9 in December. At its peak in 2022, the ratio was two to 1.
The Fed left interest rates unchanged during their January meeting given solid economic growth and signs of stabilisation in the labour market. But chair Jerome Powell signalled that further weakening in the job market could prompt additional rate cuts.
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Recent jobless claims data, which rose last week amid frigid weather, have shown few signs of widespread layoffs despite some high-profile announcements of workforce cuts. Amazon.com and United Parcel Service have recently laid out additional plans to reduce headcount on top of previous announcements in 2025.
Those reductions contributed to more than a doubling in the number of US announced job cuts in January from a year earlier, according to Challenger, Gray & Christmas Hiring intentions also softened, the outplacement firm’s data showed earlier on Thursday.
Consumer confidence surveys have also shown anxiety about the job market is building. The highest share of consumers since February 2021 said that jobs were currently hard to get, data from the Conference Board showed last month.
According to the Jolts report, the so-called quits rate, which measures the percentage of people voluntarily leaving their jobs each month, was unchanged near the lowest since the pandemic.
Some economists have questioned the validity of the Jolts data, in part due to the survey’s low response rate and sometimes sizable revisions. A separate index by job-posting site Indeed, which is reported on a daily basis, showed openings rose in December.
The Jolts report, initially slated for earlier this week, was delayed by the partial federal government shutdown. BLOOMBERG
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