The number of job openings in the United States decreased to 10.8 million as of January, according to data released on Wednesday by the Bureau of Labor Statistics, even as the number of available positions continues to drastically exceed the number of unemployed workers.
The most recent reading marks a decline from 11.2 million open positions in December but surpassed analysts’ forecasts, meaning that the labor market remains strong amid persistent economic turmoil. There were, meanwhile, 5.7 million unemployed individuals as of January, according to more data from the Bureau of Labor Statistics, implying that there are nearly two open positions for every available worker.
“While the forthcoming February reading is not expected to be quite as robust, the job market has remained remarkably and surprisingly resilient,” Bankrate Senior Economic Analyst Greg McBride said in remarks provided to The Daily Wire. “Layoffs and discharges were on the rise and fewer individuals quit their jobs. These modest changes underscore moderation in the job market. Even so, layoffs and job cut announcements have accelerated but have not infiltrated data on new and continuing claims for unemployment benefits.”
The largest decreases in open positions occurred in construction, accommodation and food services, and finance and insurance, while the largest increases in open positions occurred in warehousing and nondurable goods manufacturing. McBride added that any workers impacted by headcount reductions will likely have “quickly found new work elsewhere.”
The labor market has widely been considered a bright spot in an otherwise dismal economic landscape marred by record inflation and supply chain bottlenecks. The low availability of workers across the economy has worsened both phenomena as employers battle to fill open positions and increase wages to attract or retain more workers.
Rising nominal wages amid the constrained labor market conditions, however, have not translated to improved wellbeing for households: real wages, which account for the effect of inflationary pressures, have decreased by 1.5% between January 2022 and January 2023.
The unemployment rate was 3.5% as of January, according to data from the Bureau of Labor Statistics, marking the lowest joblessness rate in more than five decades. Labor force participation has meanwhile failed to recover in the wake of the lockdown-induced recession, applying additional pressure to public and private employers.
Policymakers at the Federal Reserve have monitored employment data over the past several months as they increase the target federal funds rate in a bid to combat inflation. “Inflation has remained sticky with some assistance from wage growth. The Federal Reserve appears determined to boost interest rates and to keep them high for longer,” McBride said. “The extent of future rate increases is dependent upon forthcoming data.”
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Central bankers gradually hiked interest rates by 4.5% over the past year amid a rollback in monetary stimulus implemented during the lockdown-induced recession. Federal Reserve Chair Jerome Powell told lawmakers on Tuesday that the robust labor market and continual inflation in some product categories would necessitate further rate hikes.
“We continue to anticipate that ongoing increases in the target range for the federal funds rate will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive,” he said. “We are seeing the effects of our policy actions on demand in the most interest-sensitive sectors of the economy. It will take time, however, for the full effects of monetary restraint to be realized, especially on inflation.”