The anticipated US Job Openings and Labor Turnover Survey (JOLTS) report for November 2023, set to be released on 3 January 2024, is expected to print between 8.3 to 8.5 million job openings. This forecast is below consensus expectation of 8.75 million and is also lower than the October 2023 figure of 8.73 million. If realized, this would mark the lowest reading since April 2021, driven by tighter monetary policy and companies leveraging AI to improve productivity, says GlobalData, a leading data and analytics company.
GlobalData’s US Active Jobs index, derived from high frequency company job postings dataset, which has over 90% correlation with JOLTS data and available in near real-time, shows a 5.2% month-on-month fall for November 2023. GlobalData’s proprietary JOLTS nowcasting model uses GlobalData’s US Active Jobs index to forecast JOLTS numbers.
Adarsh Jain, CFA, Director of Financial Markets at GlobalData, comments: “Exceptional monetary and fiscal policy support during the COVID-19 pandemic (April 2020 to February 2022) supported exceptional job openings, averaging over 8.8 million each month. This figure significantly exceeds the average monthly job openings of 7.2 million recorded in the pre-pandemic period from January 2019 to January 2020, a phase that aligned with the previous peak in the Federal Funds rate.
“However, since March 2022, persistent weakness in GlobalData’s US Active Jobs index mirrors the rise in US Fed Funds rate, which has helped cool the labor market. GlobalData believes, even with the current pause in Fed Funds rate and likely cuts in 2024, job openings will continue to normalise towards pre-pandemic levels, similar to 2007-2009, when job openings continued to fall despite the onset of Fed’s rate cutting cycle.”
The key dynamic resulting in the rapid decline in job openings is that the rate of job closures is surpassing the creation of new job postings across various sectors.
Jain concludes: “GlobalData anticipates a subdued trend in new job postings moving forward. This expectation is influenced not only by the tightening of monetary policy but also by the recent advancements in AI, particularly in generative AI. These are being implemented in innovative ways to enhance productivity, enabling more to be achieved with fewer resources. In fact, companies hiring across sectors with generative AI skillsets has accelerated over the last six months, as per GlobalData’s Jobs dataset.
“Job opening numbers are expected to revert to pre-pandemic levels of around 7.5 million per month over the course of the first half of 2024, with risks to the downside as companies deploy generative AI across business operations to improve productivity.”
