The US labor market showed signs of cooling, and the number of job vacancies fell to its lowest level in more than a year in November

The US labor market is showing signs of cooling again.

The Zhitong Finance App learned that according to the newly released Job Vacancies and Labor Mobility Survey (JOLTS) data, the number of job vacancies in November unexpectedly fell for the second month in a row to 7.146 million. Not only was it lower than the October level, but it also fell significantly short of the market's 7.61 million, the lowest level since September 2024.

The US Bureau of Labor Statistics (BLS) pointed out in a press release that the total number of job vacancies did not change much in November, and was still around 7.1 million; the number of recruits and total number of staff separations during the month was basically the same, at 5.1 million. In the separation structure, the number of people who voluntarily quit their jobs was about 3.2 million, and the number of layoffs and dismissals was about 1.7 million. The overall fluctuation was limited.

The JOLTS Report is an important monthly labor survey published by BLS, covering indicators such as job vacancies, recruitment, resignations, and layoffs. Unlike unemployment rates, which reflect labor supply, JOLTS focuses more on measuring labor demand. Generally speaking, a rise in job vacancies means that the company is in high demand for workers, while a decline in job vacancies is seen as a sign of weakening demand.

Looking at long-term trends, the changes in the JOLTS sub-categories after the COVID-19 pandemic are gradually showing. The data shows that from mid-2022 to September 2024, the overall number of job vacancies, recruitments and resignations declined, with the most significant drop in job vacancies. Since September 2024, recruitment and resignation data have stabilized, but job vacancies have continued to trend downward; at the same time, the number of layoffs and layoffs has slowly risen since mid-2022.

JOLTS data lags one month behind BLS's monthly employment report. As a comparison, the employment situation report previously released by BLS shows that the US added 64,000 new non-farm payrolls in November, and the growth rate has clearly slowed.

Judging from the relationship between supply and demand, the ratio of job vacancies to the number of unemployed people is an important indicator for measuring the degree of tension in the labor market. In November, the number of unemployed people in the US was about 7.831 million, with 7.146 million job vacancies, which means that each unemployed person only corresponds to 0.91 jobs, which is not only significantly lower than the pre-pandemic level, but also the lowest value since March 2021, indicating that labor demand is cooling down.

If adjusted according to population size, the job vacancy rate fell to 4.5% in November, down from 4.7% in October, and a decrease of about 885,000 jobs compared to the same period last year. By industry, job vacancies in the lodging and food service industry, transportation and warehousing, utilities, and wholesale trade declined markedly, while the construction industry bucked the trend and added about 90,000 jobs.

Among other categories, the recruitment rate in November was 3.2%, slightly lower than in October; the active resignation rate was 2.0%, up slightly from the previous month, with a significant increase in the number of resignations in the lodging and food service industry; the layoff and dismissal rate was 1.1%, slightly lower than in October, and the number of layoffs in health care, lodging, catering, and local government departments declined.

From a business cycle perspective, the six-month moving average shows that job vacancies are still higher than the number of recruiters, but have fallen back to pre-pandemic levels; both recruitment and resignations are significantly below historical highs; layoffs and layoffs continue to rise slowly, but are still slightly below pre-pandemic levels. Analysts pointed out that the resignation rate usually has an inverse relationship with the layoff rate, and changes often reflect workers' confidence and the stage of the economic cycle.

It should be noted that JOLTS data has only been counted since the end of 2000. The historical span is limited, the monthly data fluctuates greatly, and there are many subsequent revisions. Market participants generally believe that the report has important reference value in observing labor demand trends, but it is not appropriate to overinterpret it based on monthly data alone.