Job openings rose more than expected in October as investors continue to dissect the pace of the labor market slowdown amid questions over how much further the Federal Reserve will slash interest rates next year.
New data from the Bureau of Labor Statistics released Tuesday showed there were 7.74 million jobs open at the end of October, an increase from the 7.37 million seen in September. Openings in September had been at their lowest level since January 2021.
The September figure was revised lower from the 7.44 million open jobs initially reported. Economists surveyed by Bloomberg had expected Tuesday's report to show 7.51 million openings in October.
"Today’s report is yet another indication that labor demand is softening but not collapsing," Raymond James chief economist Eugenio Aleman wrote in a note following the release.
The Job Openings and Labor Turnover Survey (JOLTS) also showed 5.31 million hires were made during the month, down from the 5.58 million hires made during September. The hiring rate fell to 3.3% from the 3.5% seen in September. Also in Tuesday's report, the quits rate, a sign of confidence among workers, rose to 2.1% from 1.9% in September. Total quits increased to 3.3 million in October, reversing a recent downtrend and hitting the highest level since May.
The rise in quits falls in line with recent data from the Conference Board's Consumer Confidence survey, which recently hit its highest level since July 2023, driven by labor market optimism. In November, the difference between respondents who believe jobs are "plentiful" and those saying jobs are "hard to get" rose for the second straight month. The metric, known as the labor market differential, ticked up to a reading of 18.2% in November, an increase from the cycle low of 12.7% seen in September.
"The quits rate rose for the first time since May 2023, signaling a greater willingness for workers to leave their positions and matching the more upbeat outlook for current and future labor conditions by consumers," Oxford Economics senior economist Matthew Martin wrote in a note to clients on Tuesday.
The data kicks off a busy week of labor market reports. The November jobs report is slated for release on Friday morning. Economists expect the report to show a reversal from the dismal October employment report that many believed was heavily impacted by hurricanes and worker strikes.
The November report is expected to show the US labor market added 220,000 jobs in the month, up from the 12,000 monthly job additions seen in October. Meanwhile, the unemployment rate is expected to hold steady at 4.1%.
As of Tuesday morning, markets were pricing in a nearly 75% chance the Fed cuts interest rates by a quarter of a percentage point at its final meeting of the year on Dec. 18, per the CME FedWatch Tool.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer .