Key Takeaways

  • The U.S. Bureau of Labor Statistics (BLS) said Tuesday that job openings offered by employers rose to their highest level in five months in October, but the labor market showed signs of cooling, with hiring activity declining.
  • Healthcare, retail, and wholesale trade industries drove the overall increase in job openings, which rose to 7.67 million in October from 7.66 million in September.7.67 millionThe quits rate, or the proportion of employees who voluntarily left their employers, fell to 1.8%, the lowest level in nearly three years, reflecting workers' lack of confidence in hiring prospects.
  • "Job seekers are not feeling the holiday cheer," said Heather Long, chief economist at Navy Federal Credit Union. "Almost no one is being hired right now," she wrote in an email, adding that "the hiring rate fell back to 3.2% in October, one of the lowest levels since the Great Recession."

Deeper Analysis

Futures traders expect the Federal Reserve to cut its key interest rate by 25 basis points on Wednesday. This expectation reflects the view among some officials that the urgency of stabilizing the labor market should take precedence over inflation concerns—even though inflation has hovered around 3% in recent months, well above the Fed's 2% target.

According todata from the CME FedWatch Tool, interest rate futures traders see the probability of a 25-basis-point rate cut by the Fed rising to 87.4% from 66.9% a month ago. The current federal funds rate range is 3.75% to 4%.

"Because of concerns about the employment side of the mandate, the Fed may continue to allow interest rates to decline,"the National Federation of Independent Business (NFIB)said Tuesday.

The NFIB noted that small business "owners have been frustrated by the lack of qualified workers to fill open positions." The federation said: "Job openings have remained above historical averages throughout the year, and compensation has increased, but few new workers have actually been hired outside of government-supported institutions."

BLS data show that the hiring rate held steady at 3.2% across businesses of all sizes.

Meanwhile, the labor market has shown multiple signs of cooling in recent months: the unemployment rate rose slightly to 4.4% in September, and the pace of hiring slowed.

Over the past few weeks, unofficial indicators of labor market health have also deteriorated.

"Expectations for labor market conditions in mid-2026 remain distinctly pessimistic," the Conference Board said on November 25 when describing the results of itsmonthly Consumer Confidence Survey. Only 27.6% of consumers said jobs were "plentiful," down 1 percentage point from October.

The BLS has delayed the release of the November jobs report to December 16, six days after policymakers' meeting concludes. Due to the government shutdown, the bureau did not release the October jobs report.

Joanne Hsu, director of the University of Michigan's consumer survey, said last Friday that concerns about inflation and the job marketare troubling consumers. Although household confidence rose slightly in November from the prior month, "the overall tone of views is broadly pessimistic, with consumers continuing to cite the burden of high prices," Hsu said.

The NFIB said inflation is also troubling small business owners. The report said the net percentage of small businesses reporting price increases surged at a record pace last month. 39% of businesses reported higher average selling prices, up 8 percentage points from October.