U.S. October JOLTS job openings rebounded and exceeded expectations, layoffs decreased, and voluntary resignations increased
In October, the U.S. JOLTS job openings reached 7.744 million, expected to be 7.519 million, showing a significant rebound from the September low. The number of voluntary resignations in October rose to the highest level since May. However, the number of layoffs in October fell to the lowest level since June. Nonetheless, the hiring rate in October dropped to the lowest since June, consistent with the weak non-farm payroll report for October, as hiring activities were affected by two severe hurricanes and a large-scale strike at Boeing
The U.S. Bureau of Labor Statistics reported on Tuesday that the number of job vacancies in the U.S. rose in October, while layoffs decreased, indicating that the demand for workers is stabilizing.
In October, the JOLTS job vacancies in the U.S. reached 7.744 million, compared to the expected 7.519 million, with the previous September value revised down from 7.443 million to 7.372 million. Previously, the initial reading of September's JOLTS job vacancies unexpectedly plummeted, hitting a three-year low. The October JOLTS job vacancies saw a monthly increase of 372,000, marking the largest monthly increase since August 2023.
Since hitting a record of 12.18 million in March 2022, the JOLTS job vacancies have generally shown a downward trend, despite occasional rebounds, due to the Federal Reserve's significant interest rate hikes leading to a slowdown in demand.
The growth in job vacancies in October was primarily driven by professional and business services, as well as accommodation and food services, which increased by 209,000 and 162,000, respectively. The number of job vacancies in the information sector rose by 87,000; however, the number of job vacancies in the federal government decreased by 26,000.
The ratio of job vacancies to the labor force in October rose from 4.4% to 4.6%.
The ratio of job vacancies to unemployed persons in October was 1.1, a figure that the Federal Reserve closely monitors. This ratio has generally been on a downward trend over the past two years. In March 2022, this ratio reached a record level of over 2. It was 1.2 before the COVID-19 pandemic and is currently slightly below pre-pandemic levels.
In October, the number of voluntary resignations increased to 3.33 million, the highest level since May, up by 228,000 from September. A higher number of voluntary resignations indicates a tighter labor market, suggesting that workers are confident in leaving their current jobs for better opportunities, and vice versa.
In October, the number of layoffs decreased to 1.63 million, the lowest level since June, down by 169,000 from September. Despite recent layoffs or announced layoff plans by companies like Boeing, General Motors, and Cargill, there are almost no signs that layoffs will increase more broadly.
In October, the total number of hires was 5.31 million, a decrease of 269,000 from September, with the hiring rate dropping to 3.3%, the lowest level since June, down 0.2 percentage points month-on-month. The poor hiring data in October aligns with the previously weak non-farm payroll report for October, as hiring activities were affected by two severe hurricanes and a large-scale strike at Boeing.
As the U.S. labor market cools, related data has even surpassed inflation, becoming the most closely watched economic data by the market. Policymakers and investors use this information to assess whether more signals of a soft landing for the U.S. economy have emerged. The Federal Reserve is currently gradually lowering interest rates, hoping to avoid further weakening of the U.S. labor market The market expects that the Federal Reserve will continue to cut interest rates at the December meeting.
The JOLTS report is one of the labor indicators that U.S. Treasury Secretary Janet Yellen valued most during her tenure as Federal Reserve Chair. This indicator is also highly regarded by the Federal Reserve as labor market data. However, it is important to note that some economists question the reliability of JOLTS statistics, as the current response rate for the survey is very low, about half of what it was a few years ago.
JOLTS data typically lags behind non-farm payroll data by one month. This Friday, the U.S. will release the significant non-farm payroll report for November. Due to two hurricanes and a Boeing strike, the U.S. added only 12,000 jobs in October, the lowest level since 2020, and far below the expected 100,000. Economists expect a significant rebound in the November non-farm payrolls to be released on Friday, with the unemployment rate expected to remain at 4.1%