According to the latest data from the U.S. Bureau of Labor Statistics, job openings in September fell to 7.44 million, down from a revised 7.86 million in August. This marks the lowest level since January 2021, coming in below economists’ expectations of 8 million job openings. This data release arrives just ahead of the Federal Reserve’s meeting on November 7, providing further evidence of a gradually cooling labor market.

Decline in Job Openings and Slight Uptick in Hiring

The data also indicated that 5.55 million hires were made in September, up from 5.43 million in August, with the hiring rate ticking up slightly to 3.5%. Gregory Daco, chief economist at EY, commented that the data reveals a decrease in labor market tightness, though not a sharp downturn. “The slight rebound in the hiring rate suggests that the floor hasn’t fallen out from under the labor market; instead, we’re seeing a gentle cooling in demand for workers,” Daco noted.

Additionally, the quits rate, which measures employee confidence in job availability, declined to 1.9% in September, down from 2% in August. Nancy Vanden Houten, lead U.S. economist at Oxford Economics, pointed out that this trend aligns with fewer job openings and slower wage growth, which may help ease inflationary pressures stemming from the labor market.

Labor Market Cooling but No Sharp Drop

This pattern mirrors findings in the Federal Reserve’s recent Beige Book report, which highlighted low worker turnover and limited layoffs across most districts. Hiring remains focused on replacement rather than growth, signaling a more modest slowdown rather than a rapid contraction in the labor market.

As the Federal Reserve prepares for its November meeting, further labor market data will remain in the spotlight, as it could influence policymakers’ decisions on interest rates and economic direction.