Openings fall slightly in January; layoffs up

Drop latest indication red-hot labor market is slowly cooling

Demand for workers let up slightly in January, a possible sign that employers are gradually easing off their frenetic pace of hiring even as the job market remains strong.

There were 10.8 million job openings, a moderate decrease from 11.2 million on the last day of December, the Labor Department reported Wednesday in the Job Openings and Labor Turnover Survey, known as JOLTS.

The total number of open jobs per available unemployed worker — a figure that the Federal Reserve has been watching closely as it tries to cool the job market and ease inflation — was relatively unchanged at 1.9.

Job opening numbers for California are expected to be released next week.

Still, although employers have proved remarkably resilient in the face of the Fed's interest rate increases, the drop in open positions is the latest indication that the once red-hot labor market is slowly cooling. Some industries that had shown unexpected strength recorded notable declines in open positions, including construction, where job openings fell by 240,000. Even leisure and hospitality businesses, like restaurants and bars, which have been trying to adjust to unrelenting demand, had slightly fewer open positions.

“Job openings remain pretty sky high in January,” said Julia Pollak, chief economist at the employment site ZipRecruiter. “But this report finally points to the slowdown in the labor market that many of us on the front line of the labor market have been observing.”

An open question is whether the slowdown in the job market is sufficient for policymakers. Jerome Powell, the Federal Reserve chair, made clear Tuesday that recent reports showing the persistent strength of the labor market could require a more

robust response from central bankers.

Matthew Martin, an economist at Oxford Economics, said in a research note Wednesday, “While the January JOLTS report shows job openings are heading in the right direction for the Fed, the decline is far too modest to convince that labor market conditions are cooling enough to bring down inflation.”

A clearer picture of the job market will come Friday, when the Labor Department releases employment data for February.

Other measures in the report Wednesday also suggested that the labor market was gently settling into a more normal state. Layoffs, which have been extraordinarily low outside of some high-profile companies mostly in the tech sector, rose by 241,000, to 1.7 million. That is the highest number since December 2020, when a winter wave of COVID-19 cases swept across the country and jolted the economy anew.