December JOLTS: Slide in openings signals labor demand remains weak

Wells Fargo Research Team Wells Fargo

Summary

The December JOLTS report underscored the labor market remains in a precarious position. Job openings fell to 6.5 million and are down around 10% over the past year. The ongoing slide suggests a turnaround in hiring conditions is not yet upon us. Turnover data also suggest labor market activity remains subdued. The hiring and quit rates remained near their lowest levels in roughly a decade in December, excluding the initial months of the pandemic.

The low hiring environment and subdued rate of workers voluntarily leaving their jobs risks pushing layoffs higher. The layoff rate remained at 1.1% in December, but more forward-looking data from Challenger show job cut announcements trending higher. While announcements have not risen to a degree that signal a mass loss in employment, the pickup is a reminder that firms are not opposed to cutting headcount when other options have been exhausted.

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Wells Fargo Research Team

Wells Fargo

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