U.S. job openings hovered at a historically high level in January as labor shortages and firm worker demand carrying over into the beginning of this year.
Vacancies totaled 11.263 million in the first month of 2022, the Labor Department said in its Job Openings and Labor Turnover Summary (JOLTS) on Wednesday. This compared to an upwardly revised 11.4 million openings in December, which marked a record in data going back to 2001. Consensus economists were looking for 10.950 million vacancies for January, according to Bloomberg consensus data.
By industry, some of the largest decreases in job openings were seen in accommodation and food services, where vacancies fell by 288,000 to reach just under 1.5 million. Transportation, warehousing and utilities also saw openings drop by more than 130,000. Durable goods manufacturing, however, saw job openings increase by 85,000.
Openings across the economy have totaled than 10 million for eight consecutive months, coming in well above pre-pandemic averages to highlight the strain employers across industries have found in seeking enough workers to keep pace with demand. Job openings were coming in around 7 million per month throughout 2019.
The details of the JOLTS reports have also underscored the considerable leverage many workers have been able to command in the current market. The number of quits in January edged down just slightly, or by 151,000 compared to December, to reach 4.3 million. And the quits rate decreased to 2.8%, which was still elevated but retreated from December's record high of 3%.
"It's certainly a job seekers' market at the moment," Mike Smith, CEO of Randstad Sourceright, told Yahoo Finance Live. "Really in the last two decades, we haven't seen this level of supply demand constraints. And that actual cost of not being able to fill critical roles for organizations at the moment has really forced them to rethink and reconsider their compensation packages, but also getting outside the box on transforming their traditional approaches to flexible work-life benefits and overall wealth packages for their particular candidates that they're trying to hire as well as their existing workforce at the moment."
Policymakers have also taken note of the persistent labor supply and demand imbalances, which have come alongside rising price pressures across the economy. Federal Reserve Chair Jerome Powell characterized the labor market as "extremely tight" in his semiannual economic update before Congress last week.
"Employers are having difficulties filling job openings, an unprecedented number of workers are quitting to take new jobs, and wages are rising at their fastest pace in many years," Powell said.
The Fed chair also said he would back a 25 basis point rate hike at the central bank's next meeting next week, kicking off the start of monetary policy tightening as the broader economy and labor market especially improved beyond the need for extraordinary policy support.
And while the latest JOLTS report comes on its usual two-month delay, the labor market data since then have pointed to even further improvements in labor market conditions. Last week, the latest monthly jobs report showed U.S. non-farm payrolls rose by 678,000 in February to accelerate from gains seen in January and December. And the unemployment rate improved more than expected to 3.8%, marking the lowest level since February 2020.
—
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube, and reddit