Job openings declined in January but still far outnumber available workers

Job openings declined slightly in January but still far outnumber available workers as the labor picture remains tight, according to data released Wednesday.

The Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS, showed there are 10.824 million openings, down some 410,000 from December, the Labor Department reported. That equates to 1.9 job openings per available worker, or a gap of 5.13 million.

Despite the decline, the total was still higher than the FactSet estimate of 10.58 million. December’s number also was revised up by more than 200,000.

“Jolts data from January highlight that while the labor market could be loosening somewhat on the margin it is still much tighter than previous historical periods and continues to pose upside risk for wages and prices,” Citigroup economist Gisela Hoxha wrote.

Federal Reserve officials watch the JOLTS report closely as they formulate monetary policy. In remarks on Capitol Hill this week, Fed Chairman Jerome Powell called the jobs market “extremely tight” and cautioned that a recent spate of data showing resurgent inflation pressures could push interest rate hikes higher than expected.

Powell told the Senate Banking Committee on Wednesday that the JOLTS report was one critical data point he will be examining before making a decision on rates at the March 21-22 policy meeting.

The JOLTS report showed that hiring was brisk for the month, with employers bringing on 6.37 million workers, the highest total since August.

Total separations were little changed, while quits, a signal of worker confidence in mobility, fell to 3.88 million, the lowest level since May 2021. Layoffs, however, rose sharply, up 241,000 or 16%.

Earlier Wednesday, payroll processing firm ADP reported that companies added 244,000 workers for February, another sign that hiring has been resilient despite Fed rate hikes that are aimed at slowing economic growth and cooling the labor market.

There were some other signs of softness, with construction openings falling 240,000, or 49%. The ADP report indicated the trend followed through to February, with the sector losing 16,000 jobs. Leisure and hospitality, a leader in job gains over the past two years or so, also saw a decline of 194,000 openings in January.

Markets will get a more comprehensive view of the jobs picture when the Labor Department releases its nonfarm payrolls report Friday. Economists surveyed by Dow Jones expect payrolls to increase by 225,000 and the unemployment rate to hold at 3.4%.