The numbers: Job openings in the U.S. fell in October to a 28-month low of 8.7 million, adding to evidence that the labor market is cooling off in response to higher interest rates.
Job listings sank from a revised 9.4 million in September, the Labor Department said Tuesday.
While many openings are never actually filled, the trend in job postings gives cues to the health of the labor market and the broader economy. Job openings have declined steadily from a record 12 million in 2022.
The Federal Reserve views a declining number of openings as evidence that higher interest rates are slowing the economy and easing the demand for labor. That could help relieve the upward pressure on wages and make it easier for the central bank to reduce inflation to its 2% annual goal.
The number of people quitting jobs, meanwhile, was barely changed at 3.6 million.
Job quitters had climbed to as high as 4.5 million last year before ebbing. People tend to stay in their current jobs when the economy weakens and jobs become harder to find.
Key details: Job openings fell the most in health care, finance, real estate, retail and hospitality — the parts of the economy in which hiring had been strongest.
The number of job openings for each unemployed worker dropped again to 1.3 last month from 1.5 in September,
The ratio is down from a peak of 2.0 in 2022 and almost back to a pre-pandemic norm of around 1.2 or so. Fed officials had been watching the ratio closely as a gauge of labor-market strength.
The so-called quits rate among private-sector workers, meanwhile, was unchanged at 2.6% and back to pre-pandemic levels.
The U.S. is forecast to add 190,000 new jobs in November. The jobs report comes out on Friday.
The economy added a modest 150,000 new jobs in October to mark the second smallest gain since 2021.
Big picture:The labor market has lost some of its sizzle and is likely to cool off even further. That’s good news for the Fed as it aims to tame inflation without triggering a recession.
The central bank is widely expected to leave interest unchanged at its next big meeting in a week.
Looking ahead: “This is a clear indication that the labor market continues to weaken and should confirm that no additional rate hikes will be announced at the December [Fed] meeting,” said Eugenio Aleman, chief economist of Raymond James.
Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX fell in Tuesday trades.