Job openings hit their lowest level since March 2021 in January, showing further signs of rebalancing in the labor market.
There were 8.86 million jobs open at the end of January, a slight decrease from the 8.89 million job openings in December, according to new data from the Bureau of Labor Statistics released Wednesday. Economists surveyed by Bloomberg had expected 8.85 million openings in January.
The report also showed the quits rate, a sign of confidence among workers, slipped to 2.1%, down from 2.2% in the previous month, and its lowest level since August 2020. Additionally, the Job Openings and Labor Turnover Survey (JOLTS) showed 5.7 million hires were made in the month, a slight decrease from the 5.8 million seen in December.
The hiring rate sat at 3.6% in January. In sum, Oxford Economics lead US economist Nancy Vanden Houten described Wednesday’s report as “consistent with a labor market that is still quite strong.”
The release comes as Federal Reserve Chair Jerome Powell testifies on Capitol Hill. Powell described the labor market as “relatively tight” but noted that “supply and demand conditions have continued to come into better balance.”
Elsewhere on Wednesday, the ADP Research Institute’s monthly pay insights report showed wage gains for people who change jobs increased in February for the first time since November 2022.
ADP chief economist Nela Richardson told Yahoo Finance this is noteworthy because wage gains for job changers are “most sensitive to current labor market activity.” Richardson added that the number shows the massive wage growth seen during the pandemic is “not going to bed quietly.”
“[Wages] are actually showing that tightness in terms of the labor market is still very prevalent,” Richardson said.
There were, however, other signs on Wednesday that could indicate slowing wage growth is on the horizon, which many believe would be a welcome sign for the fight against inflation. SoFi’s head of investment strategy Liz Young noted on X that quits tend to lead wage growth by about nine months. So the decrease in the quits rate seen in January’s JOLTs report is pointing to “further wage deceleration” in the pipeline.
Another update on wages will come with the February jobs report, which is slated for release at 8:30 a.m. ET on Friday. Economists surveyed by Bloomberg expect wages grew at 4.3% during February down from 4.5% in January. Broadly, economists project 200,000 jobs were added to the US economy while the unemployment rate remained flat at 3.7%.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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