US job openings jumped by 74,000 in December as the labor market unexpectedly nosedived
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- US job openings gained by 74,000 to 6.6 million in December, according to Tuesday JOLTS data.
- The reading handily exceeds economists' consensus estimate of 6.4 million openings.
- The hiring rate dropped to 3.9% from 4.2%, the same level seen just before the pandemic.
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Job openings in the US unexpectedly increased in December as US payrolls contracted for the first time since the start of the pandemic.
Openings grew by 74,000 to roughly 6.6 million through the last month 0f 2020, according to Job Openings and Labor Turnover Survey, or JOLTS, data published Tuesday. The climb handily exceeded the 6.4 million openings projected by economists surveyed by Bloomberg.
The state and local governments and the arts and entertainment industries shed the most openings, while the professional and business services sector saw the biggest increase.
The US hiring rate fell to 3.9% from 4.2%. The pace sits just above levels seen before the pandemic, yet with nearly 10 million Americans still jobless, the reading signals a long period ahead before the US economy fully heals.
Separations, which include quits and layoffs, dropped by 63,000 to 5.5 million. The quits rate rose to 2.3% from 2.2%. The total number of quits climbed by 106,000 to 3.3 million, though the increase was offset by a drop in layoffs and discharges of 243,000.
About 1.6 Americans competed for every job in December, the same ratio as was seen in November.
The JOLTS data further details the labor market's decline two months ago. US nonfarm payrolls posted an unexpected decline in December that was revised even lower last week. The slide snapped a seven-month streak of additions and marked a major slowdown in the economic recovery.
The Tuesday release also comes days after the Bureau of Labor Statistics' January payrolls report. The country gained 49,000 jobs last month, less than half the 105,000 additions projected by economists. The unemployment rate fell to 6.3% from 6.7%, though the bulk of that improvement came from a decline in the labor force participation rate.
The weaker-than-expected data strengthens the Biden administration's argument for more fiscal stimulus. Payroll growth has been either stagnant or negative for three months. Vaccine distribution and falling COVID-19 cases should help the economy, but economists argue it will take much more to fill the virus-induced hole in the labor market.
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