MARK-TO-MARKET: Job openings dwindle as CEOs look to 2023

Published monthly by the US Department of Labor, the JOLTS, or Job Openings and Labor Turnover Survey, reports the monthly change in job offers, hires, quits and other employee departures. On Wednesday, the October survey reported 10.3 million non-farm job openings among private and government employers nationwide. That was slightly below the 10.5 million that Wall Street had forecast.

The current level of 10.3 million job openings is 353,000 lower than the previous month’s total. Despite the monthly decline, the number of job offers remains historically high. For perspective, in February 2020, the number of job openings was seven million. In addition, for the sixteenth consecutive month, the number of job offers exceeded 10 million. The record was 11.9 million set in March.

Of the 11 economic sectors tracked by the Department of Labor, six posted a monthly decline in job openings. The sector with the largest monthly decline was professional and business services, which saw 146,000 fewer job openings. Government (-138,000), education and health services (-105,000), manufacturing (-89,000) and construction (-52,000) round out the top 5 largest declines.

Geographically, only the West reported an increase in job openings, adding 36,000 in October. The other three regions – the South (-210,000), the Midwest (-175,000) and the Northeast (-5,000) – all saw monthly declines.

Since January, the number of job openings across the country has fallen by 949,000. This reinforces growing unease among corporate CEOs about the economic outlook for 2023. A recent survey by the Conference Board, a U.S. provider of economic data and analysis, showed that 96% of CEOs expect a recession in the next 12 months. Consequently, a rapidly expanding list of Fortune 500 companies have announced layoffs or hiring freezes, which is expected to further reduce the number of job openings in the months ahead.

This is by no means a dire prospect for the US labor market. On Friday, the Department of Labor announced that 263,000 new jobs had been added in November, beating Wall Street’s forecast of a gain of 200,000. The nation’s unemployment rate held steady at just 3.7%. That said, the labor market is expected to cool in 2023. Many experts predict the unemployment rate will hit 4-5% by the end of next year.

High inflation and rising interest rates have already started to weigh on the US economy. And as these economic stress fissures continue to widen, this strain should eventually spill over into the US labor market.