US job openings were 10.824 million as of the last business day of January, critical data released on Wednesday showed.
Although I think it’s fair to call the figures another disappointment for “team transitory” (whatever’s left of those folks), there were some tentative signs of progress towards balancing the labor market.
The headline JOLTS print represented a 410,000 decrease in openings versus the prior month. That was good news, but consensus expected a far larger decline, to 10.5 million.
The data included revisions, so I suppose you could suggest consensus isn’t the best guide. But then: Consensus is never the best guide, particularly post-pandemic.
Hires picked up slightly, but the gap with openings remained very wide, where that means almost 4.5 million. That, in turn, suggests that “progress” is a stretch when it comes to describing Wednesday’s update.
Note that although quits fell to the lowest in 20 months, 3.88 million Americans still left their jobs in January. That’d count as wholly anomalous outside of the current, pandemic-distorted context.
The quit rate, at 2.5%, was the lowest since March of 2021, but it too remains historically elevated.
A look across industries showed the largest decreases in job openings were in construction, where openings fell nearly a quarter million, accommodation and food services (-204,000) and finance and insurance, where openings fell 100,000.
As a reminder that no one should need, the Fed has staked the legitimacy of the “soft landing” narrative on the idea that demand moderation facilitated by policy tightening will ultimately render millions of openings superfluous, thereby helping to balance the labor market without too many currently employed workers having to lose their jobs.
Skeptics of that view abound, and all of them argue that actual job losses are inevitable on the path to lower inflation. On that score, layoffs and discharges rose to the highest since December of 2020 in January.
As Elizabeth Warren might put it, Fed hikes are succeeding in getting more people “thrown out of work.”
The bottom line, I think, is that most aggregates in the January JOLTS report were directionally “right.” In other words: Key metrics didn’t worsen in the context of the worker shortage, even if progress towards a truly balanced labor market is maddeningly slow and hard to come by.
The government on Wednesday noted that total quits in 2022 were 50.6 million, the highest annual level in the survey’s history.
