Why are surging job openings in December important?

According to recently released labour data, the US employment market is still robust and there is a continued need for workers. Seasonally adjusted Bureau of Labour Statistics data released on Tuesday shows that the number of open positions in the US increased unexpectedly to an estimated 9.026 million in December.

The BLS’s monthly Job Openings and Labour Turnover Survey (JOLTS) data shows that, for the first time since September, the number of openings has above 9 million and is greater than November’s upwardly revised total of 8.925 million. Consensus estimates from FactSet indicate that 8.714 million was the figure that economists had anticipated.

The good news is that if someone is seeking for supplementary job or is still unemployed, they have possibilities. The bad news is that it implies that consumers may increase their spending, which is now against the wishes of the Federal Reserve.

What the FOMC wants to see

The Fed had been expecting more wiggle room in the labour market to aid in the central bank’s efforts to rein down inflation. The Federal Reserve will make its most recent policy announcement on Wednesday. An imbalance between the demand and supply for labour may lead to higher salaries, which may then force businesses to raise prices.

Fed Chair Jerome Powell has stated in recent months that the labour market is still strong but in better balance than it was throughout the previous recovery. Early in 2022, there was a spike in job opportunities that exceeded 12 million.

On December 13, 2023, US Federal Reserve Chairman Jerome Powell conducts a press conference following the Monetary Policy Committee meeting in Washington.

Though other JOLTS report metrics “changed little” from the previous month, according to the BLS, the data’s trajectory indicates a stable but weakening labour market.

The question that America must answer is whether the Fed can control inflation and have a soft landing, of tamed inflation without significant job losses. Without a doubt, the number of openings continues to surpass the 7 million pre-pandemic levels. Although it’s not as tight as it was, say, a year ago, the employment market is still robust.

A month after plummeting to some of the lowest levels in years, the number of new recruits increased to 5.621 million.

As a percentage of all employment, the rate of hires in November was 3.5%. That was the lowest hiring rate since 2014, excluding the early phases of the pandemic. Layoffs rose to 1.616 million in December from 1.531 million in November, but they are still much below pre-pandemic levels.

Employees, meanwhile, seem to be less inclined to hop ship or may not be seeing as many opportunities: At 3.392 million, the number of quits fell to its lowest point since January 2021.

According to data released earlier this week by Glassdoor, employee trust is declining amid a reversal in hiring and headline-making mass layoffs in industries like internet, media, and transportation. In January, the employee confidence index fell to a record-low 45.6%. The index was created by Glassdoor in 2016.

This is a manifestation of workers’ growing anxiety about their job security. One of the most important labour market data this week is JOLTS, which is worth highlighting. The carefully followed monthly jobs report is released on Friday morning.