Job Openings Crater Most Since 2023 To Lowest In 5 Years As Payrolls Set For Negative Print

We warned earlier today that the US labor market was rolling over sharply again when we observed the surge in initial jobless claims and the near record January for job cuts (biggest since 2009). Moments ago the BLS confirmed that the US job market is indeed falling off a cliff, when the latest JOLTS report (job openings and labor turnover) showed that in December the number of US job openings crashed by 604K to 6.542 million from 7.146 million, the biggest one month drop since Oct 2023. Of course, to make the drop a bit more palatable, the DOL decided to dramatically revised the November number lower (of course), from 7.146 million to 6.928 million, which however would have made the November plunge even worse. So to keep the monthly changes on an apple to apple basis, we take the cumulative drop from the past 2 months and find that the past two months saw a massive 907k drop in job openings, the biggest since March 2023!

According to the BLS, the number of job openings decreased in professional and business services (-257,000), retail trade (-195,000), and finance and insurance (-120,000).

One curious observation: after tumbling to a 4 year low, the number of government job openings rose from 701K to 738K.

The collapse in job openings also means that the 4 year period of more job openings than unemployed is now a distant memory: in December, the number of job openings was almost one million (961K to be precise) lower than the number of unemployed workers.

As a result of the deteriorating job openings picture, the ratio of job openings to unemployed workers tumbled to 0.9x, the lowest since early 2021.

The small silver lining to today’s otherwise terrible JOLTS print was that the number of hires and quits both rose modestly, the former up to 5.293 million from 5.121 million, while the latter rose from 3.204 million from 3,193 million.

But while hiring may have rebounded (which is meaningless if layoffs rise even more), another labor market indicator that hit today suggested that next week’s delayed January payrolls report will be a complete bloodbath. Earlier this morning, Revelio Labs – which had become the go to alternative while the govt data was suspended during the shutdown – reported that in January payrolls plunged by 13,270, driven by goods producing jobs which dropped by 5.1K but mostly a plunge in govt jobs, which declined by 16.4K.

While this number uses a different methodology than the BLS, if we get anything even remotely close in next week’s jobs report, not only will the US jobs recession be confirmed but the Fed will rush to cut rates as soon as March, well before Kevin Warsh can “shrink the Fed’s balance sheet” as has become trendy, if completely false, to say these days.