7.67 million job openings, highest since May, 2nd highest all year, and up from a year ago.

By Wolf Richter for WOLF STREET.

Due to the government shutdown, there is no good figure for job openings in September, and the September release was canceled, but “partial data that businesses self-reported electronically” was included in today’s October release, according to the Bureau of Labor Statistics. The October data were collected as normal in November. So month-to-month comparisons for October lack a solid base (September data is only partial). August was the last complete data set (7.73 million job openings), and the August-to-October comparisons are valid, and that’s how we’ll get around the September “partial data” issue.

Job openings jumped by 443,000 in October from August, seasonally adjusted, to 7.67 million. That October total of 7.67 million job openings was the highest since May, the second-highest all year, and up year-over-year by 55,000 openings.

The three-month average (red in the chart) jumped by 154,000 openings (average of the increases in August, September, and October), to 7.52 million openings in October, the highest number of job openings since February, and up by 63,000 from a year ago. For over a year, the three-month average has hovered near the pre-pandemic high of January 2019, but has come down a lot from the era of the labor shortages.

Job openings are largely the result of quits, layoffs & discharges, and other separations (retirements, deaths while employed, etc.), all of which are tracked by today’s Job Openings and Labor Market Turnover Survey (JOLTS). Only a small portion of these 7.67 million openings represent newly created jobs.

Quits fell by 150,000 in October from August to 2.94 million workers who quit their jobs voluntarily, such as to take a better job somewhere else (blue in the chart).

The three-month average fell by 75,000 to 3.05 million quits (red in the chart).

Fewer quits means fewer job openings left behind, and less hiring needed to fill those newly left-behind job openings.

The survey tracks turnover in the labor market: How many workers quit voluntarily to work somewhere else, how many were discharged for whatever reason, how many retired or died while employed, etc., and how many were hired to fill these left-behind job openings.

Turnover in the labor market had exploded in 2021 and 2022 during the labor shortages. That episode of massive churn was expensive and inefficient for employers, but ended up reshuffling where people worked, with better matches between workers’ skillsets and aspirations and companies’ needs.

Layoffs & discharges rose by 129,000 in October from August, to 1.85 million, in the middle of the pre-pandemic range. The three-month average rose to 1.79 million, the highest since November 2024, but still at the lower portion of the pre-pandemic range.

These relatively low layoffs & discharges – though up from the era of the labor shortages – has been confirmed by other data, including very low unemployment insurance claims.

How low are the layoffs & discharges in relationship to nonfarm payrolls, which have grown over the years? The three-month average of layoffs & discharges amounted to just 1.1% of nonfarm payrolls, which would have been a record low before the pandemic in the JOLTS data, which goes back to 2001.

These relatively low layoffs and discharges translate into fewer job openings, and less hiring to fill those job openings.

Hires rose by 23,000 in October from August, to 5.149 million.

The three-month average declined by 113,000, to 5.21 million hires, roughly where it had been in August, after the spurt of hiring earlier this year.

Most of these hires replaced workers who’d quit their jobs, or who were discharged or laid off for whatever reasons, and who’d retired, etc. Only a small portion were hired to fill newly created jobs. It’s part of the labor turnover.

But the low number of quits and the relatively low number of layoffs and discharges mean that companies need to hire fewer people to fill the job openings left behind, and job seekers are having a harder time finding a slot.

The retirement waves are over. Other separations (retirements, deaths while employed, etc.) totaled 255,000 in October, at the very low end of the 25-year range.

The 12-month average, which irons out the huge month-to-month squiggles and shows the trends, inched down to 305,000 for October.

These monthly totals are small compared to the 7.5 million job openings. There had been a wave of retirements in 2021 and another in 2023 through early 2024, but they weren’t extraordinarily big, as the chart shows:

The main thing to take away from this Job Openings and Labor Market Turnover Survey is that the labor market is in pretty good shape, with a sharp increase of job openings in October, while the red-hot turnover in the labor market in 2021 and 2022 has cooled, with companies hanging on to their workers, and workers hanging on to their jobs – creating a situation that requires less hiring.

But low turnover makes it harder for job seekers to find a job. Each time someone quits a job, a job opening is created that needs to be filled, and the company needs to either promote someone into that job, which creates a lower-level job opening, or hire someone from the outside for that job. When there are lots of quits, it creates more opportunities for job seekers to slide into one of those left-behind job openings. Now there is less movement in the labor market, and therefore less hiring, and people looking for a job are having a harder time finding a slot. And other data has confirmed this trend.

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WOLF STREET FEATURE: Daily Market Insights by Chris Vermeulen, Chief Investment Officer, TheTechnicalTraders.com.