US job openings fell to their lowest level in more than five years, another sign that hiring remains sluggish despite strength in the broader economy, according to Labor Department data released Thursday.
The report showed vacancies declined to 6.5 million in December, down from 6.9 million in November and the fewest since September 2020. The Labor Department also reported that layoffs rose slightly and that quits—often viewed as a measure of workers’ confidence in finding new jobs—were basically unchanged at 3.2 million.
Labor market watchers noted that the December openings figure came in lower than economists had forecast. In the coming week, economists are expected to focus on the government’s next hiring and unemployment updates for January, due next Wednesday.
At the same time, analysts were weighing a contrast between overall economic performance and the labor market. The economy’s growth remained strong through the third quarter, but employment momentum has been limited: employers added just 28,000 jobs a month since March, compared with roughly 400,000 per month during the 2021-2023 hiring surge after COVID-19 lockdowns.
Other signals pointed in the same direction. On Wednesday, ADP reported that private employers added 22,000 jobs last month, far fewer than forecasters expected, and Challenger, Gray & Christmas said companies cut more than 108,000 jobs in January—the most since October and the worst January for job cuts since 2009.
Heather Long, chief economist at Navy Federal Credit Union, said in a commentary that the hiring slowdown would likely persist for some time, writing: “The hiring recession isn’t going to end anytime soon.’’ She added that job openings in December had fallen to the lowest level since September 2020 and described it as another sign of “how little hiring – or interest in hiring – is happening in this economy.”
Economists said they are working to understand whether hiring will pick up later to catch up to stronger output, whether growth will slow to align with a weak labor market, or whether advances in artificial intelligence and automation are changing how quickly companies create jobs even when production remains strong.
Even with the contrast, policymakers and businesses will be looking closely at the next batch of labor-market numbers, including the details expected in the government’s January hiring and unemployment report due next Wednesday.