A "rapid decline" in US job openings in
November 2023 is being attributed to job closures outpacing the creation of new
jobs along with the tightening of company money policies and advancements in
generative AI with apparel jobs in particular seeing a strong decline by the
end of 2023.
Data
analysis company GlobalData said the upcoming US Job Openings and Labour
Turnover Survey (JOLTS) report for November 2023, which is due to be released
later today (3 January 2024), is expected to print between 8.3 to 8.5 million
job openings.
However, it believes this forecast is below
the consensus expectation of 8.75 million and is also lower than the October
2023 figure of 8.73 million.
If realised, GlobalData explained this would
mark the lowest recorded value since April 2021, driven by tighter monetary
policies and companies using AI to improve productivity.
GlobalData pointed out the key dynamic
resulting in the rapid decline in job openings is the rate of job closures is
surpassing the creation of new job postings across various sectors.
GlobalData’s US Active Jobs index, which is
derived from a high frequency company job postings dataset shows there is a
5.2% month-on-month decline in November 2023. This dataset is said to have over
an 90% correlation to JOLTS data and is available in near real-time.
GlobalData’s director of financial markets
Adarsh Jain noted: “Exceptional monetary and fiscal policy support during
the Covid pandemic (April 2020 to February 2022) supported exceptional job
openings, averaging over 8.8 million each month. This figure significantly
exceeds the average monthly job openings of 7.2 million recorded in the
pre-pandemic period from January 2019 to January 2020, a phase that aligned
with the previous peak in the Federal Funds rate.
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“However, since March 2022, persistent
weakness in GlobalData’s US Active Jobs index mirrors the rise in US Fed Funds
rate, which has helped cool the labour market. GlobalData believes, even with
the current pause in Fed Funds rate and likely cuts in 2024, job openings will
continue to normalise towards pre-pandemic levels, similar to 2007-2009, when
job openings continued to fall despite the onset of Fed’s rate cutting cycle.”
US apparel industry jobs dwindling
According to US apparel job filings data
shared by GlobalData, a comparison between jobs postings from January to
December 2022 and January to December 2023 revealed a decline in the number of
‘jobs posted’, with ‘jobs closed’ exceeding this figure during the period.
Between
January and December 2022, jobs postings totalled 1,185,394 with 1,223,239 jobs
closed. In contrast, the period from January to December 2023 witnessed 708,938
jobs posted and over 814,190 jobs closed.
Notably,
active jobs in the US apparel market experienced a substantial decline,
decreasing from 250,251 in January-December 2022 to 144,589 in the
corresponding period of 2023.
In line with the data, Jain concluded
GlobalData anticipates a subdued trend in new job postings moving forward.
He said: “This expectation is influenced not
only by the tightening of monetary policy but also by the recent advancements
in AI, particularly in generative AI. These are being implemented in innovative
ways to enhance productivity, enabling more to be achieved with fewer
resources. In fact, companies hiring across sectors with generative AI
skillsets has accelerated over the last six months, as per GlobalData’s Jobs
dataset. Job opening numbers are expected to revert to pre-pandemic levels of
around 7.5 million per month over the course of the first half of 2024, with
risks to the downside as companies deploy generative AI across business
operations to improve productivity.”