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📌 Key idea:
Key takeaways
- Employers had 7.7 million job openings in October, more than economists expected and higher than August’s total of 7.2 million.
- However, layoffs also rose to their highest levels since 2023, while hiring fell to levels rarely seen since the Great Recession.
- This data is not expected to derail the Fed’s expected interest rate cut on Wednesday, as economists point to continued weakness in the labor market.
Business in the United States continues to slow, but it is not collapsing.
Today’s report on Jobs and Labor Turnover (JOLTS) had mixed messages for economists. Job openings in October rose slightly since the last report before the government shutdown, but layoffs also rose, reaching their highest levels in more than two years.
“The latest numbers confirm that the US job market is not collapsing, providing investors and consumers alike with little comfort,” wrote Brett Kenwell, eToro US investment analyst. “Job openings in October reached their highest level since January, but it is worth noting that layoffs reached their highest level in several years.”
Why is this important for the economy?
American companies are playing defense, hiring cautiously, but without panic. The health of the labor market has a direct impact on consumer confidence and spending, which drives overall economic growth. When hiring slows or the rate of layoffs rises, the risk of an economic slowdown or recession grows.
In October, the number of job openings reached 7.7 million. An increase from 7.2 million job openings reported in the August edition of the JOLTS Job Opening and Labor Turnover Survey (JOLTS). Data for September was not published due to the government shutdown, but the October report showed job openings the previous month were also near 7.7 million.
Economists surveyed The Wall Street Journal and Dow Jones Newswires Job openings are expected to remain near August levels of 7.2 million. The data should not influence the direction of the Federal Reserve, which is likely to announce a rate cut when it concludes its regular meeting on Wednesday, given officials’ growing concerns about the health of the labor market.
Higher layoff rates with fewer workers leaving voluntarily
Total separations in October fell to about 5.05 million, down from September and August levels, Bureau of Labor Statistics data showed. A total of 2.9 million workers left their jobs in October, down from the 3.1 million who left their jobs the previous month, indicating that fewer workers are willing or able to leave their jobs. Meanwhile, layoffs totaled 1.9 million, the highest level since January 2023.
“Overall, the pace of layoffs remains under control and does not indicate a disruption in the labor market. At the same time, a new multi-year low in the exit rate shows declining confidence in the labor market,” wrote Oren Klachkin, a nationwide financial market economist.
Employers hired 5.1 million workers in October, with a hiring rate of 3.2%, one of the lowest rates since the Great Recession, according to Heather Long, chief economist at Marine Federal Credit Union.
“For anyone looking for work, this economy looks like the Grinch,” she wrote. “Although it’s encouraging that job openings are up in October, it’s hard to get too excited until companies start hiring people.”
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