Employees sort parcels from online retailer Amazon at a distribution center.
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US job openings in October fell to their lowest level since 2021.
In October, available job openings fell to 8.7 million from a downwardly revised 9.4 million in September.
It’s likely a welcome development for the Fed, which has been attempting to cool the labor market.
Christmas may have come early for the Federal Reserve, as the latest Job Openings and Labor Turnover survey published Tuesday by the Bureau of Labor Statistics showed that the US labor market continues to cool ahead of the next policy meeting.
Driven largely by the retail sector, the number of job openings dipped from a downwardly revised 9.4 million job openings in September, to 8.7 million by the end of October, below the consensus forecast among economists surveyed by Bloomberg, and the lowest level since early 2021.
The 3.6 million quits and 1.6 million layoffs and discharges were little changed month-over-month.
It is likely a rosy development for US central bankers, who have been angling to cool the red-hot US labor market without sparking a damaging recession. Consensus is building that the Fed has largely succeeded in threading the needle.
The latest job opening figures reinforce the case for a soft-landing scenario — job openings are moving higher yet the unemployment has remained relatively low. Inflation, meanwhile, tumbled to 3.2% on an annualized basis in October, down from 3.7% in September.
“The decline in openings brings the number of job openings per unemployed American to just 1.3, the lowest since August 2021, well below its March 2022 peak of 2.0,” said Julia Pollak, chief economist at ZipRecruiter. “By that ratio, a measure of labor market tightness often cited by Fed Chair Jerome Powell, the labor market has slackened substantially in recent months.”
At the same time, Pollak added, the low and stable layoffs rate gives reason for workers to feel confident, with many demographics in the workforce enjoying more job security than pre-pandemic times.
Markets expect the Fed to begin cutting interest rates as soon as the first quarter of 2024. On Tuesday, CME’s FedWatch Tool showed traders priced in a 55% probability for a quarter-point cut by March.
Strategists at ING forecasted that the central bank will cut rates six times next year, while Barclays expects four reductions in 2024.