Job openings surpassed nine million in December 2023

Though the total number of job openings has fallen since late 2022, the number was on the rise once again in December 2023. A total of 9 million jobs were open across the country in December, up from 8.8 million in October of the same year. Additionally, while levels of workers quitting their job have fallen over the last year, more workers are being laid off than they were a year earlier. All of this data shows the complexity of the forces at work in the US labor market as the economy adjusts to the post-covid and geopolitically unstable environment.

Labor market conditions continue to soften

The Federal Reserve’s Beige Book was released on January 17th, and it reports that the labor demand seems to be decreasing. The report notes that there are more applicants, lower turnover rates, and less pressure on businesses to increase wages. The Philadelphia Fed also reported that labor availability has improved, and price increases have slowed down, partly due to consumers pushing back more on higher prices, especially among lower-income households. Federal Reserve analysts in different districts across the country predict that the labor market will continue to soften over the next year.

When there are more job openings, especially when the unemployment rate is low, it implies that there is a high demand for labor or a mismatch between the available workforce and the type of jobs required. For instance, the Boston Federal Reserve reported in the Beige Book released in mid-January that labor scarcity persisted for auto mechanics and some highly skilled manufacturing workers. Scarcity and high inflation forced some manufacturing and IT companies to increase compensation for their workers.

However, the fact that fewer workers are quitting their jobs indicates that they are less confident in finding better employment if they leave. Although the number of workers quitting their jobs remains high, reaching 3.3 million in December, it has decreased from over four million workers leaving their posts in most months throughout 2021 and 2022. Industries that saw quits increase from November to December 2023 include wholesale trade (+1 percent), financial activities (+0.1 percent), and leisure and hospitality (+0.5 percent). When looking at involuntary separations, 1.5 million workers were laid off in December, with those in the Professional and business services (-393,000), trade, transportation, and utilities (-334,000), and construction (-169,000) seeing the highest number of layoffs.