The US labor market shows signs of cooling off again, with the number of job vacancies in November dropping to the lowest level in over a year.

The US labor market is showing signs of cooling again. According to the latest Job Openings and Labor Turnover Survey (JOLTS) data, job openings in November unexpectedly decreased for the second consecutive month, dropping to 7.146 million, not only lower than October levels but also significantly below the market's expectations of 7.61 million, reaching the lowest level since September 2024. The US Bureau of Labor Statistics (BLS) stated in a press release that the total number of job openings in November remained relatively stable at around 7.1 million; the number of hires and total separations in the month were essentially the same, at 5.1 million each. In terms of separations, voluntary quits were around 3.2 million, while layoffs and discharges were around 1.7 million with limited overall fluctuations. The JOLTS report is an important labor survey released monthly by the BLS, covering indicators such as job openings, hires, quits, layoffs, and discharges. Unlike the unemployment rate, which reflects labor supply, JOLTS focuses more on measuring labor demand. Generally, an increase in job openings signifies strong labor demand, while a decrease in job openings is seen as a signal of weakening demand. Looking at the long-term trend, changes in JOLTS subcomponents since the COVID-19 pandemic are gradually becoming evident. Data shows that from mid-2022 to September 2024, job openings, hires, and quits have all declined, with job openings experiencing the most significant drop. Since September 2024, hires and quits have stabilized, but job openings continue to trend downwards; meanwhile, layoffs and discharges have slowly increased since mid-2022. JOLTS data lags one month behind BLS's monthly employment report. As a comparison, BLS's earlier employment situation report indicated that the US added 64,000 nonfarm jobs in November, with growth already noticeably slowing. In terms of supply and demand, the ratio of job openings to unemployed individuals is an important indicator of labor market tightness. In November, with the US having approximately 7.831 million unemployed individuals and 7.146 million job openings, it means that each unemployed person corresponds to only 0.91 job openings, significantly lower than pre-pandemic levels and hitting the lowest value since March 2021, indicating that labor demand is cooling off. Adjusting for population size, the job vacancy rate in November fell to 4.5%, down from 4.7% in October and a decrease of around 885,000 job openings compared to the same period last year. By industry, job openings in accommodation and food services, transportation and warehousing, utilities, and wholesale trade showed significant declines, while the construction industry saw an increase of around 90,000 job openings. In other subcategories, the hiring rate in November was 3.2%, slightly lower than October; the quit rate was 2.0%, a small increase from the previous month, with a noticeable uptick in quits in the accommodation and food services industry; the layoff and discharge rate was 1.1%, slightly lower than in October, with decreases in layoffs in the healthcare, accommodation and food services, and local government sectors. From a business cycle perspective, the six-month moving average shows that job openings remain higher than hires but have returned to pre-pandemic levels; hires and quits are significantly lower than historical highs; and although layoffs and discharges continue to slowly rise, they are still slightly lower than pre-pandemic levels. Analysts point out that the quit rate is usually inversely related to the layoff rate, with changes often reflecting worker confidence and economic cycle stages. It is important to note that JOLTS data has only been collected since late 2000, with a limited historical span and considerable monthly volatility and subsequent revisions. Market participants generally believe that the report holds significant reference value in observing labor demand trends but caution against making excessive interpretations based solely on monthly data.