The US labor market’s sluggish trajectory continued in November, with newly released government data revealing a sharper-than-expected decline in job openings and historically weak hiring activity. The figures paint a picture of an economy caught in what economists are calling a “no-hire, no-fire” limbo, where employers remain cautious about expansion while largely avoiding layoffs.
According to the Job Openings and Labor Turnover Survey from the Bureau of Labor Statistics, there were 7.15 million job openings at the end of November, falling short of the 7.6 million economists had projected. This marks a continuation of the downward trend in available positions, with October’s figures also revised lower from 7.7 million to 7.45 million. The decline was particularly pronounced in accommodation and food services as well as transportation and warehousing, though construction showed some gains.
The timing of these weakness signals is notable, as November also saw the unemployment rate climb to a four-year high of 4.6%. This combination of rising joblessness and declining opportunities suggests the labor market may be losing momentum more rapidly than many forecasters anticipated.
Perhaps most concerning is the collapse in hiring activity. The hiring rate dropped to just 3.2% in November, marking one of the weakest readings since the Great Recession. Only April 2020, during the depths of the pandemic lockdowns, recorded a lower rate at 3.1%. Heather Long, chief economist at Navy Federal Credit Union, characterized the situation bluntly as a “hiring recession,” noting that virtually no jobs have been added outside the healthcare sector since April.
The data reveals an economy where workers and employers alike are playing it safe. While separations held steady at 5.1 million—unchanged from both October and the previous year—the quits rate rose to 2%. This metric, traditionally viewed as a gauge of worker confidence, suggests employees retain some optimism about finding new opportunities, even as hiring activity stalls.
Not all indicators are pointing downward, however. Data from payroll processor ADP showed private employers added 41,000 positions in December, recovering from losses in the previous month. Bank of America’s internal employment analysis echoed this modest improvement, suggesting that the worst of the labor market slowdown may be behind us. The bank’s institute noted that while the “low-hire, low-fire” dynamic persists, there are signs that the deceleration may have stabilized.
As markets await Friday’s official unemployment data for December, the November figures serve as a reminder of the delicate balance facing policymakers. The Federal Reserve must navigate between supporting a weakening labor market and managing inflation concerns, all while employers demonstrate reluctance to commit to significant workforce expansion.
The coming months will be critical in determining whether this represents a temporary soft patch or the beginning of a more sustained period of labor market weakness.