Job openings increased, and beat expectations, to 11 million in December, up from 10.5 million the previous month, while the number of quits declined slightly, to 4.1 million, down from 4.2 million, according to the latest data from the Bureau of Labor Statistics (BLS).
Blue-collar jobs were foremost in worker demand, with openings in accommodation and food services increasing by 409,000 for the month. Retail trade and construction services saw notable gains as well.
Overall, most sectors had more jobs to offer in December. However, job openings in the information sector, which includes tech and social media companies, collapsed by a little more than half last month, from 216,000 to 109,000.
“Americans in search of new jobs should gain a measure of confidence from news of an increase in job openings,” said Mark Hamrick, senior economic analyst at Bankrate. “That suggests an increase to 1.9 job openings for every individual deemed unemployed.”
Despite the increase in demand for workers, fewer employees are leaving their jobs. Quits decreased by 100,000 from November to December, with transportation and utilities exhibiting the largest declines.
Workers within the other services sector—a broad category which includes pet care, laundry and dry-cleaning, machine repair, and even dating websites—bucked the downward resignation trend, with 65,000 more workers quitting in December than in November.
Elise Gould, senior economist at the Economic Policy Institute (EPI), said the changes in resignations are negligible and that labor conditions continue to favor workers.
Quits have remained stable above historical levels, Gould said in note. “Hiring continues to outpace quits in every major sector as workers seek and find new jobs.”
With respect to the labor market, Hamrick, like many economists, is keeping a close eye on the Federal Reserve.
“One of the big questions for the job market this year will be the extent to which the Federal Reserve’s rate-raising campaign causes a rise in joblessness and a further slowdown in hiring,” Hamrick warned. “Chairman Jerome Powell has talked extensively about the mismatch between demand and supply of labor, as he and his colleagues look to vanquish historically high inflation.”
Both job openings and quits remain elevated compared to historical levels, a sign that workers have ample choice while employers are struggling to hire talent.
From early 2018 to the end of 2020, total job openings hovered around seven million, despite the brief COVID-induced shock in April 2020. Openings then shot up to around 11 million by July 2021 and have fluctuated around such levels ever since.
The unprecedented leap in job openings, coupled with unemployment recently falling to 3.5 percent, in line with pre-pandemic lows, could embolden Powell’s commitment to tighten financial conditions. In a press conference toward the end of last year, the Fed chair emphasized that reducing inflation would likely “require a sustained period of below-trend growth.”
Hamrick noted that Fed policy has hit sectors like housing, technology, and finance the hardest, with manufacturing beginning to show signs of stress.