Vacancies fell in January, but there are still far more available workers

A “Now Hiring” sign is displayed on store shelves in New York City on October 21, 2022.

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Vacancies fell slightly in January, but still far outnumber available workers as the labor force remains tight, according to data released Wednesday.

The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) showed there were 10.824 million jobs, down 410,000 from December, the Labor Department said. This corresponds to 1.9 vacancies per worker, or 5.13 million vacancies.

Despite the decline, the total was still above the FactSet estimate of 10.58 million. The number of December was also revised to more than 200 thousand.

“Jolts data for January suggest that while the labor market may have softened somewhat at the margin, it is tighter than in previous historical periods and poses higher risks to wages and prices,” Citigroup economist Gisela Hokha wrote.

Federal Reserve officials closely monitor the JOLTS report as they formulate monetary policy. In a speech on Capitol Hill this week, Fed Chairman Jerome Powell called the labor market “very tight” and warned that a flurry of recent data showing a rebound in inflation could push interest rates higher than expected.

Powell told the Senate Banking Committee on Wednesday that the JOLTS report is one of the key data points he will examine before making a decision on rates at the March 21-22 policy meeting.

The JOLTS report showed that hiring was brisk during the month, with employers bringing in 6.37 million workers, the most since August.

The total number of departures was little changed, while quits, a sign of worker confidence in mobility, fell to 3.88 million, the lowest level since May 2021. However, layoffs rose sharply, to 241,000, or 16%.

Payroll firm ADP reported on Wednesday that companies added 244,000 workers in February, another sign that hiring has held steady despite the Fed’s rate hikes, slowing economic growth and a cooling labor market.

Construction openings fell 240,000, or 49%, in other signs of softness. The ADP report showed a trend through February, when the sector lost 16,000 jobs. Leisure and hospitality, the largest job gain in the past two years, also declined by 194,000 openings in January.

Markets will get a more comprehensive look at the jobs picture when the Labor Department releases its nonfarm payrolls report on Friday. Economists polled by Dow Jones expect payrolls to rise by 225,000 and the unemployment rate to remain at 3.4%.

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