In the context of a gradually cooling labor market on the cusp of a soft landing, today’s JOLTS report is about as good as can reasonably be expected. Layoffs remained low and openings ticked up alongside quits — signs that employer and job seeker confidence, respectively, are improving. The hires rate ticked down, likely reflecting temporary, hurricane-related disruptions in October, and the increase in openings and quits should be expected to translate into more hires going forward. These kinds of small steps in the right direction are what we want to see as the market comes in for a landing — no overly quick movements in either direction, just a smooth, gradual glide in.
Job openings rose to 7.7 million in October, and more recent data from Indeed shows further strengthening in November, which bodes well for future months. After rising the last few months, hires ticked back down to 3.3% — a rate we reached earlier this year and in line with weaker 2013 hiring (after excluding pandemic-impacted data). While concerning on the surface, some of the slowing in hiring may be the result of hurricane disruptions, as employers may have been keeping openings up but pushing back interviews or start dates to deal with the fallout from Helene and Milton. On a brighter side, the quits rate ticked up to 2.1% for the first time since May of this year – a sign that job seekers may be gaining a little more confidence in labor market opportunities.
Today’s data keeps a soft landing in the cards, but the US labor market feels a lot like a car winding through a gradually narrowing mountain pass road. There is still room to maneuver, but the path is much tighter than it was a few miles back. The fact that the labor market has cooled consistently since 2022 without detrimental rises in unemployment or layoffs is remarkable. While sharp bends somewhat obscure the future, glimpses of the vista ahead are becoming more frequent. But we’re far from turning on cruise control — we must continue to keep our eyes on the road.
