US Job Openings Hit 5-Month High In October While Hiring Slows As Fed Faces Key Rate Decision On Wednesday
U.S. job openings hit a five-month high in October, signaling steadier demand, but slower hiring points to a cooling labor market— a trend that could influence the Federal Reserve's interest rate decision, which is due Wednesday.
Openings Up, Hiring Slows
According to the Job Openings And Labor Turnover (JOLTS) report released by the Bureau of Labor Statistics (BLS), U.S. job openings in October rose to 7.67 million, up from 7.66 million in September.
The healthcare and retail sectors were the primary drivers of this increase. Despite the surge in job openings, employers have been slow to fill these positions, with hirings dropping by 218,000 to 5.149 million in October.
The number of workers quitting their jobs, a key indicator of labor market confidence, also decreased slightly to 1.8%, the lowest level in over five years. Lay-offs, however, increased by 4% to 1.9 million, the highest level since early 2023. Most of the job cuts occurred in the accommodation and food services industries, as well as across state and local government roles.
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Labor Data Signals Softer Fed Path
The latest labor market data could have implications for the Federal Reserve’s upcoming interest rate decision. The Fed might be inclined to ease its monetary policy, given the recent ADP numbers, which showed a decrease of 32,000 positions in November.
Meanwhile, data from global outplacement and executive coaching firm Challenger, Gray & Christmas shows a sharp drop in November layoffs, but employers remain hesitant to add new workers, reflecting a labor market still cautious amid soft demand, tariff pressures, and rising operating costs.
Financial markets largely anticipate that the Fed will reduce its benchmark overnight interest rate for the third time this year, by 25 basis points to a range of 3.50%-3.75% on Wednesday, driven by concerns about the labor market.
However, the December rate cut isn't guaranteed, Fed Chair Jerome Powell has said, but broader sentiment within the central bank is shifting. New York Fed President John Williams signaled that cuts may be appropriate "in the near term," while Governor Christopher Waller has been more direct, citing growing labor-market weaknesses as a reason to begin easing sooner, Reuters reported.
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