Labor’s Market: Job Openings Dip, But Record Number of Quits

Summary Job openings dipped slightly in November in a tentative sign that demand for workers was cooling even before COVID cases began to take off again. Nevertheless, hiring needs remain exceptionally strong. Labor continues to hold the upper hand as evidenced by the quit rate matching a record high of 3.0%. Wage pressures are set to remain elevated with JOLTS data pointing to a tighter labor market than the familiar unemployment rate suggests.

Good Help is Hard to Find and Harder to Keep

  • Job openings dipped over November to end the month at 10.6 million. Along with some easing in the share of small businesses planning to hire, demand for workers appears to be cooling off a touch, although it remains plenty hot. With openings and hiring plans still near record rates, we look for hiring to have rebounded after November’s underwhelming initial gain of 210,000, and have penciled in an increase of 400,000 jobs in December’s payroll report to be released on Friday.
  • While the emergence of the Omicron variant in late November represents a risk to how vigorously firms tried to staff up in December, the biggest headwind to hiring remains the availability of workers. The number of unemployed workers per job opening fell to a fresh record low of 0.65 in November (Figure 2), leaving businesses increasingly reliant on workers returning to the labor force.