Job openings slide to 2nd lowest level in 5 years as hiring remains sluggish

U.S. employers posted 7.1 million job openings in November, a significant decline from October’s 7.4 million, signaling continued hesitancy to expand payrolls despite robust economic growth, according to Labor Department data released Wednesday.

The drop in job postings represents the lowest level since September 2024, and outside of that month, marks the fewest openings in nearly five years. This reduction in open positions occurred across several sectors, with notable decreases in shipping and warehousing, hospitality, and state and local government. However, retail and construction sectors bucked the trend, showing increases in available positions.

While companies are not actively expanding their workforces, they appear reluctant to let go of current employees. The Labor Department report showed a concurrent drop in layoffs, suggesting a “low-hire, low-fire” job market environment where employed workers enjoy relative job security, but those seeking employment face limited opportunities.

This paradoxical labor market stands in contrast to other economic indicators. The U.S. economy grew at a robust annual rate exceeding 4% in the July-September quarter of last year. Economists anticipate that growth remained solid, though somewhat slower, in the final quarter of 2025.

The divergence raises crucial questions about the trajectory of the U.S. economy in the coming year. Will hiring accelerate to match economic expansion, or will persistent weak job creation eventually drag down overall economic performance? A third possibility emerging in economic discussions is whether automation and artificial intelligence technologies are enabling companies to maintain productivity growth without corresponding increases in employment.

Some positive signals emerged in the report. The number of workers voluntarily quitting their jobs increased slightly to 3.16 million in November, up from just under 3 million in October. Economists typically view higher quit rates as a positive indicator, reflecting worker confidence in finding better opportunities. However, the figure remains historically low, suggesting lingering caution among workers.

The JOLTS (Job Openings and Labor Turnover Survey) report provides particularly valuable insights following data collection delays caused by last fall’s government shutdown, which affected the regular release of employment and inflation statistics.

In a separate report released Wednesday, payroll provider ADP indicated that businesses added 41,000 jobs in December, a modest improvement after shedding 29,000 positions in November. Small businesses with fewer than 50 employees added 9,000 jobs, a welcome reversal after previous months of job losses in this sector.

“It is a slower labor market,” said Nela Richardson, chief economist at ADP. “The labor market isn’t falling off a cliff. We still see some job growth, and we don’t see an uptick in layoffs.”

Additional data from the Bank of America Institute, which tracks paycheck deposits among its customers, suggested hiring may have accelerated in December. Their analysis showed job growth increasing to 0.6% compared to a year earlier, up from just 0.2% in November.

“It does look like, in our data, that the worst of the slowdown could be behind us,” noted David Tinsley, senior economist at Bank of America Institute, during a call with reporters.

Small businesses have faced particular challenges in the current economic environment, with many struggling to absorb the costs associated with President Donald Trump’s tariff policies. Unlike larger corporations, smaller firms often lack the financial flexibility to manage increased import costs or pass them along to customers.

Friday’s upcoming monthly jobs report for December will provide additional perspective on whether the job market is gaining momentum or continuing to lag behind broader economic growth as the new year begins.