Key facts
- U.S. employers posted 7.1 million job openings in November, a decrease from 7.4 million in October.
- This represents the lowest number of job openings in nearly five years.
- Layoffs declined, while job quits increased slightly but remained historically low.
- ADP reported a rise in private sector job additions in December.
- The labor market is characterized by companies holding onto workers despite a slowdown in hiring.
U.S. employers posted 7.1 million open jobs at the end of November, marking the lowest level in nearly five years and signaling a continued reluctance to ramp up hiring despite recent economic growth. The Labor Department reported this figure on Wednesday, a decrease from 7.4 million openings in October.
Despite the slowdown in job openings, layoffs also fell, suggesting companies are prioritizing retaining their current workforce. This dynamic contributes to a "low-hire, low-fire" labor market, offering job security to existing employees but making it challenging for those seeking new positions. This situation contrasts with solid economic growth, which exceeded a 4% annual rate in the third quarter of last year.
Economists are closely watching whether hiring will accelerate to match economic growth or if sluggish job gains will eventually impede the economy. A third possibility is that automation and artificial intelligence could sustain economic growth without significant job creation. Further insights are expected with the release of the December jobs report.
In November, job openings saw sharp declines in shipping and warehousing, restaurants and hotels, and state and local government sectors, while retail and construction experienced increases. The number of Americans quitting their jobs rose slightly to 3.16 million, indicating some confidence in finding better employment, though quits remain historically low.
Separately, ADP reported that businesses added 41,000 jobs in December, an improvement from shedding 29,000 in November. Data from the Bank of America Institute also suggested a pickup in hiring in December, with job gains increasing to 0.6% from 0.2% in November. Nela Richardson, chief economist at ADP, described the labor market as slowing but not collapsing, with continued job growth and no significant uptick in layoffs.