Small Decline in U.S. Job Openings in January

Job openings were little changed in January, edging down 26,000 (-0.3% m/m, -15.0% y/y) to 8.863 million in January from a slightly downwardly revised 8.889 million in December (previously 9.026 million) according to the Job Openings and Labor Turnover Survey. In general, job openings have been trending down since early 2022, reflecting ongoing, though gradual, softening in the labor market, although the pace of decline has slowed over the past six months. The latest reading is well below the recent peak of 12.182 million reached in March 2022. However, there is still a sizable excess of openings over the number unemployed. In January, this excess increased to 2.739 million, the highest in four months, from 2.621 million in December. The job openings rate was unchanged at 5.3%. This rate is calculated as the ratio of job openings to total nonfarm employment plus openings.

In this release, the BLS incorporated the annual benchmark revisions of the nonfarm payroll employment data that were reported on February 2, 2024. They also incorporated revisions to the JOLTS seasonal adjustment factors. Adjusted and unadjusted data from January 2019 forward were subject to revision.

Private sector openings increased 1.0% m/m (-14.8% y/y) to 7.963 million in January, their highest level since September. The private job openings rate edged up to 5.6% from 5.5% in December. The rise in private openings was concentrated in services-producing sectors in information openings up 19.2% m/m and openings in finance up 11.8% m/m. Mining openings slumped 9.4% m/m while construction openings declined 4.8% m/m. By contrast, manufacturing openings increased 6.1%, their second consecutive monthly gain. Government openings fell 10.4% m/m.

Total hiring fell 1.7% m/m (-10.8% y/y) to 5.687 million, the sixth monthly decline in the past eight months. The hiring rate edged down to 3.6% from 3.7% in December. Private sector hiring declined 1.1% m/m (-10.3% y/y). Hiring was strongest in the goods-producing sectors with gains of 27.8% m/m in mining, 6.4% m/m in construction and 6.2% m/m in manufacturing. By contrast, hiring generally fell across the services-producing sectors, led by an 8.4% m/m decline in education and health services hiring. Government hiring slumped 9.7% m/m in January, reflecting a 10.8% drop in state and local government hiring.

Total separations declined 1.4% m/m (-11.2% y/y) to 5.341 million in January, the lowest reading since January 2021. The separation rate was unchanged at 3.4%. Private separations edged down 0.8% m/m in January, their seventh monthly decline in the past eight months. Private quits declined 1.5% m/m, their third consecutive monthly decline. Private layoffs edged down 0.1% m/m in January. Quits are voluntary separations initiated by the employee and are often viewed as an indicator of workers’ willingness to leave jobs for other opportunities. Private quits are currently on a clear downtrend, pointing to a softening of labor-market conditions. By contrast, private layoffs are currently lower than they were at the beginning of 2023, probably indicating that employers are reluctant to layoff workers in a relatively tight labor market.

The Job Openings and Labor Turnover Survey (JOLTS) data are available in Haver’s USECON database.