Job openings bounced in October on need for IT workers

The number of job openings and people quitting their jobs ticked upward in October while layoffs edged down, signaling a modest improvement in hiring conditions amid a broader tightening in the labor market.

Job openings increased to 7.7 million from 7.3 million in September, the Labor Department reported Tuesday, with tech and information sector openings jumping to their highest level since 2022 at 208,000 available positions.

October quits came in at 3.3 million, up from 3.1 million in September and 3.2 million in August. Quits were still down on the year from the 3.6 million in October 2023. 

Layoffs dropped to 1.6 million from 1.8 million in September and stayed about the same compared to last year.

Despite the increase in new positions to be filled, new hires were down on the month, falling from 5.6 million in September to 5.3 million.

“A robust rebound in job openings suggests limited lingering aftershocks to labor market activity following October’s double-whammy of storms and strikes,” Noah Yosif, chief economist at the American Staffing Association, said in a commentary.

Economists were struck by the jump in IT openings as well as by the record-low number of layoffs in the construction sector, which fell to 97,000 from 170,000.

The increase in information sector jobs “is consistent with recent tech stock performance in the wake of the Fed’s first few interest rate cuts, and may well signal the start of a tech hiring turnaround,” Julia Pollak, chief economist at ZipRecruiter, wrote in an analysis.

The relatively robust number of October job openings occurs within a broader tightening of labor market conditions following a series of interest rate hikes by the Federal Reserve in response to elevated inflation that is now in the process of being unwound.

There’s now a little more than one open job in the economy for every unemployed person, a ratio that’s held steady since June, representing much tighter labor conditions than in the direct aftermath of the pandemic, when there were two open jobs for every job seeker.

“Job openings … have normalized considerably over the last 2.5 years since their peak in March 2022,” Economic Policy Institute senior economist Elise Gould wrote in a commentary Tuesday.

Job openings have decreased from more than 12 million in early 2022 down to their current level of 7.7 million, giving the Fed some wiggle room on how quickly it wants to stimulate the economy.

“Trends have created a gradual cadence of cooling within the labor market which has given the Federal Reserve breathing room to keep interest rates high and patiently await further progress on inflation,” Yosif said.