US job openings undershot meaningfully in key labor market data released Tuesday.

There were 7.6 million open positions on the last business day of December, the BLS said. That very nearly matched the lowest guess (sorry, “estimate”) from three-dozen economists. The range was 7.5 million to 8.9 million.

As the figure below shows, the 556,000 month-to-month decline counted as the largest sequential drop since October of 2023.

Hires picked up marginally, but remained near post-pandemic lows.

The JOLTS headline was the second-lowest since the US labor market began to overheat in early 2021. The only print lower than the readout for last month was September’s headline.

Quits were 3.197 million, up slightly from November. The rate, at 2.0, was unchanged from November’s (upwardly-revised) reading.

Most readers know the narrative for that series: The quit rate’s indicative of a “normalization” process that’s mostly complete. Quits are “churn.” High churn’s associated with intense competition for scarce workers, who’re prone to switching jobs given the pay incentives on offer from employers desperate to hire. That, in turn, biases wage growth higher which can feed inflation. So, a subdued quit rate’s seen as good news at the Fed.

The closely-watched jobs-to-jobless ratio for December was 1.10, down from 1.15 in November. Again, that’s indicative of normalization, if not proper “softness.”

All in all, Tuesday’s JOLTS release should help ameliorate some of the angst around labor market-related inflation pressures. You know, the kind of labor market-related inflation pressures the Fed swears don’t exist, even as they’ve stopped cutting rates citing sticky inflation in precisely the places where it’d show up if it were indeed related to resilient hiring and buoyant wages.

The downside is that more prints like Tuesday’s “low” JOLTS headline could point to a nascent slowdown. As BMO’s Ian Lyngen put it, “The softness on the jobs front reinforces the lingering concerns that the Fed’s tight policy stance might still be cooling the labor market beyond what has been evident via the nonfarm payrolls series.”