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U.S. job openings increased marginally in October after surging in September, but subdued hiring and the lowest level of resignations in five years underscored the economic uncertainty that economists have largely blamed on tariffs.
The Labor Department’s monthly Job Openings and Labor Turnover Survey, or JOLTS report, was released on Tuesday as Federal Reserve officials started a two-day policy meeting. Financial markets expect the U.S. central bank will cut its benchmark overnight interest rate by another 25 basis points to the 3.50%-3.75% range on Wednesday out of concern for the labor market. The Fed has lowered borrowing costs twice this year.
“The job market isn’t collapsing but it is certainly losing steam,” said Oren Klachkin, financial markets economist at Nationwide. “We anticipate Fed officials will try to get ahead of labor market weakness with another 25 basis points rate cut tomorrow even as inflation remains above the 2% goal.”
Job openings, a measure of labor demand, were up 12,000 to 7.670 million by the last day of October, the Labor Department’s Bureau of Labor Statistics said. Economists polled by Reuters had forecast 7.150 million unfilled jobs. The report incorporated data for September, whose release was canceled because of the 43-day federal government shutdown.
Vacancies soared 431,000, the most in nearly a year, to 7.658 million in September. The BLS said it had “temporarily suspended use of the monthly alignment methodology for October preliminary estimates,” adding that “use of this methodology will resume with the publication of October final estimates.”
The bulk of the job openings in October were in the trade, transportation and utilities sector, with 239,000 vacancies, mostly at retailers. There were 114,000 fewer open positions in the professional and business services industry. Job openings in the accommodation and food services sector fell 33,000. The federal government had 25,000 fewer vacancies.
The job vacancies rate was unchanged at 4.6%. Hiring dropped by 218,000 to 5.149 million in October, with most of the declines in construction, professional and business services, healthcare and social assistance as well as accommodation and food services industries. The hires rate slipped to 3.2% from 3.4% in September. There were 5.367 million hires in September.
Layoffs crept up 73,000 to a still-low 1.854 million, concentrated in the accommodation and food services sector. The layoffs rate rose to 1.2% from 1.1% in September.
Stocks on Wall Street were mixed. The dollar gained versus a basket of currencies. U.S. Treasury yields were mostly higher.
“No Hire, No Fire” Labor Market
The combined September and October reports suggested the labor market remained in what economists and policymakers call a “no-hire, no-fire” state.
Labor market stagnation has been blamed on reduced labor supply amid a reduction in immigration that started during the final year of former President Joe Biden’s term and accelerated under President Donald Trump’s second administration. The adoption of artificial intelligence for some job roles is also reducing labor demand, especially for entry-level positions.
The unemployment rate rose to a four-year high of 4.4% in September. The BLS canceled October’s employment report and will not be publishing the unemployment rate for that month as the longest shutdown on record prevented the collection of data for the household survey from which the jobless rate is calculated.
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November’s delayed employment report, now due next Tuesday, will include October’s nonfarm payrolls data.
With the labor market wobbly, fewer workers are job hopping in search of greener pastures, pointing to benign wage inflation. The number of people quitting their jobs dropped 187,000, the largest decline since June 2023, to 2.941 million. That was the lowest level since August 2020 when the labor market was recovering from the first wave of the pandemic.
The quits rate, viewed by policymakers as a gauge of labor market confidence, slipped to 1.8%. That was the lowest reading since May 2020, and was down from 2.0% in September. Lower wages because fewer workers are changing jobs could, however, hurt consumer spending.
“This (quits rate) is a pretty ‘cold’ reading that has historically been consistent with wage growth of just 2.5% year-on-year,” said James Knightley, chief international economist at ING. “That’s not good news for consumption, but given in a service-sector economy, such as the U.S., the biggest cost input is the cost of your workforce, this suggests medium- to longer-term inflation will be on a downward trajectory.”
(Reporting by Lucia Mutikani; Editing by Paul Simao and Andrea Ricci )
