A “Now Hiring” sign is posted on a storefront in New York City on October 21, 2022.
Leonardo Munoz | View Press | Corbis News | Getty Images
The number of job vacancies fell slightly in January but is still far higher than the available workforce as the labor market remains tight, according to data released on Wednesday.
The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) showed there were 10.824 million job openings, about 410,000 fewer than in December, the Labor Department reported. That equates to 1.9 job openings per available worker, or a gap of 5.13 million.
Despite the drop, the total was still above the FactSet estimate of 10.58 million. The December number was also revised upwards by more than 200,000.
“January shock data shows that while the labor market could ease somewhat, it is still much tighter than previous historical periods and remains an upside risk for wages and prices,” wrote Citigroup economist Gisela Hoxha.
Federal Reserve officials are closely watching the JOLTS report as they formulate monetary policy. In a speech on Capitol Hill this week, Fed Chair Jerome Powell described the labor market as “extremely tight” and warned that a recent spate of data showing resurgent inflationary pressures could push rate hikes higher than expected.
Powell told the Senate Banking Committee on Wednesday that the JOLTS report is a critical data point he will review before making a decision on interest rates at the March 21-22 policy session.
The JOLTS report showed that hiring figures were brisk this month, with employers hiring 6.37 million workers, the highest total since August.
The total number of separations changed little, while layoffs, a signal of workers’ confidence in mobility, fell to 3.88 million, the lowest since May 2021. However, layoffs surged, rising by 241,000, or 16% .
Earlier Wednesday, payroll firm ADP reported that companies hired 244,000 new employees in February, another sign that hiring has been robust despite Fed rate hikes aimed at slowing economic growth and cooling the job market.
There were some other signs of softening, with building openings down 240,000 or 49%. The ADP report indicated that the trend continued into February, with the sector losing 16,000 jobs. The leisure and hospitality sectors, which have led the way in job creation for the past two years, also saw a drop of 194,000 job vacancies in January.
Markets will get a fuller look at the employment picture when the Labor Department releases its nonfarm payrolls report on Friday. Economists polled by Dow Jones expect the workforce to increase by 225,000 and the unemployment rate to remain at 3.4%.