US Job Openings Drop as Labor Market Cools

In December, U.S. job openings fell significantly by 556,000 to 7.6 million, the largest drop in 14 months, indicating a gradual cooling in the labor market. This decline was largely driven by reductions in professional and business services, healthcare, and finance, although there was an increase in arts and entertainment positions. Despite the drop in openings, hiring remained steady and layoffs were low, with the layoff rate unchanged at 1.1%, suggesting that the labor market is not collapsing. Economists believe that labor demand is softening but remains above pre-pandemic levels, with 1.1 job openings for every unemployed person. The Federal Reserve is likely to maintain its current policy given the labor market's stability, as indicated by Fed Chair Jerome Powell's comments. This data comes ahead of other labor market reports expected later in the week, which could further inform the Fed's decisions on interest rates.