Labor market cools as US job openings hit lowest point since March 2021

WASHINGTON — U.S. employers posted 8.7 million job openings in October, the fewest since March 2021, in a sign that hiring is cooling in the face of higher interest rates yet remains at a still-healthy pace.

While the number of job openings has decreased from the previous month, the job market continues to show resilience. Despite the Federal Reserve raising its benchmark interest rate 11 times since March 2022 to combat inflation, employers have still managed to add a solid 239,000 jobs a month this year. Additionally, the unemployment rate has remained below 4% for 21 consecutive months, the longest streak since the 1960s.

It’s important to note that the higher borrowing costs have helped ease inflationary pressures, with consumer prices rising by 3.2% in October from a year earlier, down from a peak of 9.1% in June 2022.

The upcoming November jobs report is expected to show an increase in job additions, with employers adding nearly 173,000 jobs last month. This is partly due to the end of strikes by autoworkers and Hollywood writers and actors. The unemployment rate is also expected to have remained at 3.9%, according to a survey of forecasters by the data firm FactSet.

However, despite the low unemployment rate, 1.93 million Americans were collecting unemployment benefits in the week that ended Nov. 18, the highest number in two years. This suggests that those who do lose their jobs need assistance longer because it is getting harder to find new employment.

Overall, the combination of easing inflation and resilient hiring has raised hopes that the Fed can manage a so-called soft landing — raising rates just enough to cool the economy and tame price increases without tipping the economy into recession.