The number of job openings in the United States increased by 100,000 to 9 million in December, positive news for the labor market.
The new numbers, including openings across all sectors for that month, were released as part of the Job Openings and Labor Turnover Survey, which was updated by the Bureau of Labor Statistics on Tuesday.
The increase is a sign that the labor market is holding on despite the higher interest rates, although on balance, job openings have largely fallen since peaking nearly two years ago.
“The latest news on job openings is better than expected, reflecting overall strength in the U.S. economy,” said Mark Hamrick, Bankrate’s senior economic analyst. “With little change in other components of JOLTS, a key job market theme continues to be resilience.”
Hires also rose slightly in December, to 5.6 million. That comes after a notable decline in hiring the month before.
About 3.4 million workers quit their jobs in December, little changed from the month before. The figure is equivalent to about 2.2% of the workforce.
The “quits rate” measures the number of people who voluntarily left their jobs and includes those who left their previous employment for another job and people who quit but are confident they will soon find new employment, given the tightness in the labor market.
Also of note in Tuesday’s JOLTS report: Layoffs and discharges were little changed at 1.6 million in December.
The labor market has remained strong despite the Fed’s rate hikes, which began in earnest back in March 2022. The separate monthly employment report showed the economy added another 216,000 jobs in December and the unemployment rate was at 3.7%, a low level, historically speaking.
The Fed is meeting this week to decide its next course of action on monetary policy. The overwhelming consensus among investors is that the Fed will hold rates steady.
Because of the recent progress in bringing down inflation, the Fed is now eyeing a pivot to cutting rates. The central bank has held interest rates where they are since July but now appears on the verge of cutting, with the first cut expected as soon as March.
But inflation reports from December threw a bit of cold water on the prospect of more rate cuts sooner.
The consumer price index indicated that inflation ticked up to 3.4% for the year ending in December 2023, up from 3.1% the month before and hotter than economists had predicted. Additionally, the producer price index, which gauges wholesale inflation, rose to 1%, from 0.8% the month before.
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Overall economic growth was also robust last year — a year that many economists incorrectly predicted would feature negative gross domestic product growth and a recession.
GDP grew at a 3.3% annual rate in the fourth quarter of 2023, adjusted for inflation, the Commerce Department reported Thursday, bringing growth for the year to 2.5%.