More Openings, Fewer Hires

The October Job Openings and Labor Turnover (JOLTS) report from the Bureau of Labor Statistics tells a peculiar story. Job openings ticked up to 7.67 million from September's 7.66 million, marking a five-month high. Healthcare and retail sectors led the charge, posting the bulk of new listings.

But here's the twist: employers aren't actually filling these positions. Hiring dropped by 218,000 to just 5.149 million in October. So we've got plenty of "Help Wanted" signs in the window, but fewer people walking through the door with job offers in hand.

Meanwhile, the number of workers voluntarily quitting their jobs fell to 1.8%, the lowest rate in over five years. That's notable because quit rates typically signal worker confidence in finding better opportunities elsewhere. When people stop quitting, it often means they're getting nervous about what's out there.

Layoffs paint an even starker picture, climbing 4% to 1.9 million, the highest level since early 2023. The accommodation and food services industries bore the brunt, along with state and local government positions taking hits.

What This Means for the Fed

All of this lands on the Federal Reserve's desk right before Wednesday's rate decision. The central bank is widely expected to cut its benchmark overnight interest rate by 25 basis points to a range of 3.50%-3.75%, which would mark the third cut this year.

The labor market data certainly supports easing monetary policy. Recent ADP numbers showed employers shed 32,000 positions in November, while data from Challenger, Gray & Christmas revealed that November layoffs dropped sharply, yet employers remain reluctant to hire. Companies are playing it cautious, caught between soft demand, tariff uncertainty, and rising operating costs.

Fed Chair Jerome Powell has been careful not to guarantee a December cut, but sentiment within the central bank appears to be shifting. New York Fed President John Williams suggested cuts may be appropriate "in the near term," while Governor Christopher Waller has been more explicit, pointing to labor market weakness as justification for easing sooner rather than later, according to Reuters.

Financial markets seem pretty confident about Wednesday's move. Whether that confidence extends to December depends largely on what happens between now and then.