Job openings fell considerably in October, hitting the lowest level since March 2021, the Labor Department announced on Tuesday.
There were 8.7 million job openings in October, down significantly from 9.3 million in September, according to the Job Openings and Labor Turnover Survey. That was lower than economists’ expectations of 9.3 million openings.
The rate of layoffs was little changed, as was the rate of quitting, which generally reflects workers’ confidence in their ability to find new employment.
Why It Matters: The state of the labor market affects interest rate policy.
The labor market is closely watched by the Federal Reserve as it mulls its interest rate policy. A cooling labor market tends to fuel predictions that the Fed will not further increase rates, which have risen to a range of 5.25 to 5.5 percent from nearly zero in March 2022.
The labor market has been surprisingly resilient since the Fed started its rate increases in a campaign to tame inflation. But as the job market shows signs of cooling, so has consumer spending. Many companies told investors that in the most recent quarter customers were pulling back and spending less on products and more on services and experiences. The Fed’s preferred inflation measure confirmed that consumer spending slowed in October.
At the same time, investors are increasingly hopeful that the Fed is done raising rates. Jerome H. Powell, the chair of the Federal Reserve, recently suggested in a speech that the central bank would leave rates steady if data continued to point to a cooling economy.
Background: Unemployment and openings have reverted to earlier levels.
Though the labor market is slowing, it remains a healthy landscape for workers. The unemployment rate ticked up in October, to nearly 4 percent, which is in line with prepandemic levels.
Job openings reached a record of more than 12 million in March 2022 and have trended down since. The last time job openings hovered around nine million — where it is now — was in the spring of 2021.
Though inflation has slowed significantly since the Fed started raising rates in March 2022, it remains above the central bank’s 2 percent target.
The Fed’s preferred inflation measure fell to 3 percent in October from a year earlier. But without including food and fuel prices, which are volatile and less sensitive to the Fed’s policy actions, the rate was 3.5 percent.
What’s next: The November jobs report comes on Friday.
The November jobs report will be released on Friday by the Labor Department. Economists forecast that the unemployment rate will stay around 4 percent, with a gain of about 180,000 jobs.
That report will be one of the last insights into the state of the labor market before the Fed’s next policy meeting on Dec. 12 and 13.