3/9/23 by Ashlyn Wang
Although remaining at a high level compared to pre-pandemic times, the booming labor market showed signs of a cool down, according to January’s Job Openings and Labor Turnover Summary (JOLTS) released on Wednesday by the Bureau of Labor Statistics. This slowdown is reflected in a decrease in job openings and quits, as well as an increase in layoffs.
The U.S. Labor Department reported 10.8 million job openings in January, down about 3.6% from 11.2 million in December 2022. The number of job openings faces a surge over the three years of COVID-19, from about 7 million in 2019 to an average of 11.2 million in 2022, most notably peaking at 12 million in March 2022. The construction sector faced the most significant reduction in employer-posted job openings, with as many as 240,000 positions. The finance and insurance sector faced a cutback of 100,000 vacancies, and the accommodation and food service sector had a decrease of 204,000 vacancies.
In line with the trend of diminishing job openings, the number of employees quitting their jobs declined from 4.1 million in December to 3.9 million in January. For many reasons, including a shift to new, higher-paying jobs, 2.5% of employees in the market voluntarily left their positions. Industries cited in the report included professional and business services, which saw a 221,000 decrease in quits, and education, which faced a 14,000 drop in quits. Simultaneously, Layoffs continue to progress as the market changes. The job market experienced increased layoffs and discharges, rising by a considerable 16% to 1.7 million in January.
The labor market is in its “strongest for decades” situation. The unemployment rate in January fell to 3.4%, the lowest since 1969. Federal Reserve Chair Jerome Powell spoke Tuesday in anticipation of bigger and faster “rate hikes” to address the robust economy and seek a solution for the growing inflation.
The newly released report, while illustrating a pullback in job market growth, also demonstrates that it is stuck at a relatively high point—not enough of a retreat to meet the Fed’s expectations. USA Today said the Fed officials are looking for tangible proof that inflationary pressures are positioned for being eased. Expecting an intensified focus on the future trends from the central bank officials, February’s report will come out on Apr. 4.