The U.S. labor market showed signs of stabilization in October, with job openings climbing and the number of workers voluntarily leaving their positions reaching its highest point in five months, according to data released by the Labor Department on Tuesday.
Job openings rose to 7.74 million, up from 7.37 million in September, the monthly Job Openings and Labor Turnover Survey—or JOLTS—showed. This exceeded expectations for 7.49 million and was higher than even the most bullish estimates included in the Econoday survey of analysts.
The increase in job openings was driven by gains in professional services and the hospitality industry, particularly in hotels and restaurants. There was also substantial growth in information job openings.
Despite the overall gains, manufacturing job openings contracted for both durable goods and nondurables. Construction vacancies also fell. Wholesale trade jobs fell and retail trade jobs were nearly unchanged.
Government openings were mixed, with a rise in state and local openings nearly offset by a decline in federal government openings.
Meanwhile, the number of workers quitting their jobs—a metric often seen as a sign of confidence in the job market—rose by 200,000 to 3.3 million. This marks the highest level since May. The hospitality sector, where job-switching is common, accounted for much of the increase in quits, as workers moved between employers within the industry.
Layoffs remained near historic lows, underscoring a relatively stable employment environment despite ongoing economic uncertainties.
While job openings have decreased significantly from their peak of 12 million in 2022, when businesses were scrambling to hire workers in the aftermath of pandemic-induced disruptions, they remain well above pre-pandemic levels. The unemployment rate, which has hovered near historical lows, suggests that labor demand continues to align with workforce growth. Similarly, weekly jobless claims have remained very low, indicating employers are holding on to the workforce they currently have.
The high level of voluntary quits further reflects a labor market in which workers feel confident about their prospects, indicating that many believe they can secure better positions or pay elsewhere.
As the Federal Reserve assesses economic data for signs of cooling in the labor market to combat inflation, the October figures suggest that the job market remains resilient, providing support for continued economic expansion. The figures call into question the need for further rate cuts from the Fed and cast doubt on the wisdom of the rate cuts in September and November.