Source: Economics Group of Wells Fargo Bank, N.A.
Summary
The December JOLTS data were broadly consistent with a U.S. labor market that is in a healthy place. Openings ticked higher in December but continue to gradually decline on trend. The layoff rate remained low, while the quit rate has returned to its pre-pandemic level in a sign that labor market turnover is no longer as robust as it was a couple of years ago. Less labor market churn is helping to slow labor cost growth, while the low layoff rate is helping to keep employment growth positive. We do not think today’s JOLTS data will have a material impact on tomorrow’s FOMC meeting. We remain of the view that the FOMC will start cutting the federal funds rate at its May 1 meeting.
Job Openings Tick Higher as Quits, Layoffs Are Flat
The JOLTS report for the final month of 2023 signaled that supply and demand in the labor market continue to come into better balance. Job openings rose in December to 9.0 million, slightly above the upwardly-revised 8.9 million openings in November (chart). Openings are currently 29% above their pre-pandemic level but have fallen by nearly the same amount from the peak in 2022.