US job openings reached a five-month high in October, indicating steadier demand, but slower hiring points to a cooling labor market – a trend that could influence the Federal Reserve’s interest rate decision, due on Wednesday.
Openings, recruitment slows
According to the Vacancies and labor turnover According to the JOLTS report from the Bureau of Labor Statistics (BLS), U.S. job openings rose to 7.67 million in October, up from 7.66 million in September.
Healthcare and retail were the main drivers of this increase. Despite the sharp increase in vacancies, employers have been slow to fill these vacancies; the number of hires fell by 218,000 to 5.149 million in October.
The number of workers quitting their jobs, a key indicator of labor market confidence, also fell slightly to 1.8%, the lowest level in more than five years. However, layoffs rose 4% to 1.9 million, the highest level since early 2023. Most of the job losses were in the accommodation and food sectors, as well as in national and local governments.
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Labor data points to a softer Fed path
The latest labor market data could have implications for the Federal Reserve’s upcoming interest rate decision. The Fed may be inclined to ease its monetary policy given recent ADP data, which showed a decline of 32,000 positions in November.
Meanwhile, data from a global outplacement and executive coaching agency Challenger, Gray and Christmas shows a sharp decline in layoffs in November, but employers remain reluctant to hire new workers, due to a still cautious labor market amid weak demand, rate pressure and rising operating costs.
Financial markets largely expect the Fed to cut its key overnight interest rate by 25 basis points on Wednesday for the third time this year to a range of 3.50%-3.75%, driven by concerns about the labor market.
However, the rate cut in December is not guaranteed, says Fed chairman Jerome Powell has said, but broader sentiment within the central bank is shifting. New York Fed Chairman John Williams indicated that cuts may be appropriate “in the short term,” while Gov Christopher Waller has been more direct, citing growing weakness in the labor market as a reason to start easing earlier, according to Reuters.
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Disclaimer: This content was produced in part using AI tools and was reviewed and published by Benzinga’s editorial staff.
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