US Job Openings See January Dip Despite Previous Surge, Biden Administration Faces Scrutiny Over Data Accuracy
In the latter months of 2023, US job openings declined, surprising economists who had anticipated a smooth economic transition and expected Federal Reserve rate cuts. However, last month saw a significant surge in job openings, surpassing 9 million. The latest data from the Bureau of Labor Statistics (BLS) for January, which lags by a month, indicates a mixed report. Job openings slightly decreased from a revised December figure, but met expectations. Hiring and resignations continued to decline.
According to the Department of Labor (DOL), in January, job openings rose in nondurable goods manufacturing but fell in private educational services and government sectors. The BLS tends to initially overestimate job openings and subsequently revise them downward. This trend has persisted in six of the last eight months.
Despite the slight decrease in job openings, there were still 2.739 million more job openings than unemployed workers in January, a slight increase from the previous month. This translates to a ratio of 1.45 job openings per unemployed individual, nearing pre-pandemic levels.
The notable aspect was the decline in resignations, often seen as a sign of a robust labor market, along with a decrease in hiring. This paints a bleak picture overall.
It's important to recognize that these numbers are estimates, with approximately 70% being guesswork, as acknowledged by the BLS. The Biden administration's Labor Department faces scrutiny over whether it presents stronger or weaker estimates to maintain the perception of a strong labor market amid broader economic challenges.