In a recent report released by the Labor Department, US job openings have decreased to 6.5 million in December, marking the lowest volume since September 2020 and down from 6.9 million openings recorded in November. This decline points to persistent weakness in the American job market.
Alongside this, layoffs experienced a modest uptick while the number of workers voluntarily leaving their jobs remained stable at approximately 3.2 million, an indicator often interpreted as a gauge of employee confidence in their future employment opportunities.
The December data for job vacancies arrived below economists’ expectations, positioning the labor market in an intriguing paradox. While the nation's gross domestic product (GDP), a metric measuring the total value of goods and services produced, grew at its fastest pace in two years from July through September, job creation has been notably subdued. Since March, employers have added an average of only 28,000 jobs monthly. This contrasts sharply with hiring rates during the post-COVID-19 lockdown rebound from 2021 to 2023, where monthly job additions reached approximately 400,000.
Projections for January, to be revealed next Wednesday, suggest an estimated employment increase of around 70,000 jobs among firms, public agencies, and nonprofits combined. While this forecast indicates a slight improvement over December’s estimated 50,000 jobs added, the pace remains modest.
Concurrently, data from private sources highlight similarly restrained employment trends. The payroll processor ADP reported a gain of only 22,000 jobs in the private sector for January, markedly below expectations, while outplacement firm Challenger, Gray & Christmas noted that over 108,000 positions were cut during the month, representing the highest figure of job losses since October and the most significant January downturn since 2009.
Heather Long, chief economist at Navy Federal Credit Union, commented on these trends, characterizing the current period as a "hiring recession" unlikely to conclude soon. She underscored the significance of the December job openings decline as a clear indication of diminished employer interest or capacity to recruit.
Economists currently face uncertainties regarding the labor market’s trajectory. Key questions include whether hiring activity will eventually accelerate to align with the economy’s vigorous growth, whether economic expansion may decelerate to match the subdued pace of job creation, or if advancements in artificial intelligence and automation technologies might enable continued economic progress with fewer new jobs being generated.