The numbers: Job openings rose by 150,000 to 10.9 million on the last day of December, the U.S. Labor Department said Tuesday.
Economists polled by The Wall Street Journal had forecast 10.5 million vacancies. This is only down slightly from the record of 11.1 million job openings set last July.
The number of Americans quitting their jobs fell by 161,000 to 4.3 million in December from a record in November. Prior to the pandemic, the average quits rate was 3.2 million.
The quits rate inched down to 2.9% from 3% in November.
Key details: The JOLTS report showed layoffs fell by 140,000 to 1.2 million. The layoffs rate fell to 0.8% in December, a new record low, after a 0.9% reading over the past four months. During 2018 and 2019, layoffs were running almost 50% higher than that, said Stephen Stanley, chief economist at Amherst Pierpont.
Hiring fell by 333,000 jobs to 6.3 million in December. The hiring rate fell to 4.2% in December from 4.4% in the last four months.
Big picture: This is the seventh straight month in which job openings stayed above the 10 million level.
“This is, by so many measures, a historically tight labor market,” said Federal Reserve Chairman Jerome Powell last week.
“I think there’s quit a bit of room to raise interest rates without hurting the labor market,” Powell said.
Analysts had expected some impact on the data from the spread of the omicron variant but it is hard to see at first blush.
Looking ahead: “The JOLTS data suggests that investors should continue to brace for higher inflation,” said Greg Bassuk, the CEO of AXS Investments. Employers will need to raise wages to attract and retain strong talent and will try to pass along these costs to consumers, he added.
“The December JOLTS report…does not fully reflect the impact of the omicron variant. Nevertheless preliminary signs from December JOLTS data suggest labor shortages likely intensified in January,” said Mickey Levy, chief economist for Americans and Asia at Berenberg Capital Markets.
Market reaction: U.S. stocks DJIA, -0.03% SPX, -0.05% were slightly higher on Tuesday on a busy day for earnings. In another key data point, the ISM reported that its manufacturing index fell to its slowest pace in 14 months in January.