US Job Vacancies Plunge to Lowest Level in Over Five Years
Job openings in the United States declined to their lowest level in more than five years during December, according to data from the US Labor Department. This development underscores persistent softness in the labor market despite robust economic growth, creating a puzzling disconnect between output expansion and hiring momentum.
December Data Reveals Significant Drop
The latest figures show that job openings fell to 6.5 million in December from 6.9 million in November. This marks the lowest level since September 2020 and came in below economists' expectations, signaling weaker labor demand than anticipated.
During the same period, layoffs edged higher while the number of people voluntarily quitting jobs—an important indicator of worker confidence—remained broadly unchanged at 3.2 million. This stagnation in voluntary quits suggests employees are becoming more cautious about leaving their current positions amid economic uncertainty.
Growing Gap Between Economic Growth and Hiring
The data highlights a widening gap between economic expansion and hiring momentum. While gross domestic product grew at its fastest pace in two years during the July-September quarter, job creation has slowed significantly in recent months.
Employers have added an average of just 28,000 jobs per month since March, a dramatic slowdown compared with the roughly 400,000 monthly additions during the post-pandemic hiring surge between 2021 and 2023. This represents a substantial deceleration in employment growth despite continued economic expansion.
Upcoming Data and Recent Indicators
Economists anticipate that January employment numbers, due next week, may show around 70,000 new jobs added, up from 50,000 in December. However, recent private data has pointed to subdued hiring conditions that suggest continued weakness.
Payroll processor ADP reported that private sector employers added only 22,000 jobs last month, far below market forecasts. Separately, outplacement firm Challenger, Gray & Christmas said companies announced more than 108,000 job cuts in January, representing the highest monthly total since October and the weakest January reading since 2009.
Expert Analysis and Outlook
Commenting on the trend, Heather Long, chief economist at Navy Federal Credit Union, said: "The hiring recession isn't going to end anytime soon. Job openings in December just fell to their lowest level since September 2020. It's yet another sign of how little hiring—or interest in hiring—is happening in this economy."
Economists remain divided on the outlook, with three main scenarios under debate:
- Whether hiring will eventually pick up to match strong economic growth
- Whether economic growth may slow to reflect labor market weakness
- Whether advances in artificial intelligence and automation could allow output to expand without significant job creation
This divergence in expert opinion reflects the unusual nature of the current economic environment, where traditional relationships between growth and employment appear to be shifting.
