Job Openings Fall Slightly, Employee Quits Trend Up in November 2022
The U.S. Bureau of Labor Statistics (BLS) recently released its November Job Openings and Labor Turnover Summary. This month’s report revealed the number of job openings, 10.5 million, changed little from the previous month as the Federal Reserve (Fed) continued its efforts to combat inflation. However, November’s job openings were higher than economists expected.
The number of job openings is viewed as an indication of the strength of the labor market and the broader economy. The Fed closely monitors this number since it provides a measure of the tightness of the labor market. A tight labor market means employees have greater leverage to seek higher wages.
“We do see a very, very strong labor market, one where we haven’t seen much softening, where job growth is very high, where wages are very high, vacancies are quite elevated, and, really, there’s an imbalance in the labor market between supply and demand.”
-Federal Reserve Chair Jerome H. Powell
The job opening rate remained unchanged at 6.4%. This is 0.9% lower than the peak reached in March 2022. The largest increases in job openings were in professional and business services and nondurable goods manufacturing. Other industries—finance, insurance and federal government—reported decreases in job openings.
The number and rate of employee quits changed slightly, at 4.2 million and 2.7%, respectively; however, November’s increase in the number and rate of employee quits is notable because they represent an increase from 4.1 million in September and 4.0 million in October when the number and rate of quits were trending down. While the number of employee quits remains high, it’s lower than the record 4.5 million in November 2021. Total separations increased somewhat from October to 5.9 million, but the rate was unchanged at 3.8%. Layoffs and discharges decreased slightly from the previous month to 1.4 million, and the rate remained unchanged at 0.9%. While total layoffs remained relatively low, the finance and insurance sector saw increases.
Employer Takeaways
November’s high number of job openings and employee quits suggests that the labor market is still extremely tight. Large decreases in these numbers would be viewed as evidence that the job market is softening, which would allow the Fed to raise interest rates more slowly to counter inflation.
November’s report also suggests that workers continue to feel confident to switch jobs due to the high number of job openings despite inflation. As a result, employers continue to struggle to attract and retain workers. This has resulted in increased labor costs for employers as they raise wages and offer competitive benefits to attract talent. Employers should continue to monitor employment trends to stay competitive in today’s evolving market.
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