Job Openings Hit Two-Year Low — What That Really Means

Job openings just fell to 6.54 million in December — down 386,000 from November and the lowest level since early 2023. That’s a 5.6% monthly drop and extends a pattern that’s impossible to ignore: openings have fallen 12.5% over the past year.

The headline sounds like bad news, but the story is more subtle. We’re watching a structural shift, not a crisis. Companies are moving from “hiring everything that moves” to becoming much more selective. After peaking above 12 million openings in early 2022, employers are clearly recalibrating.

That’s actually a sign of a normalizing labor market. The pre-pandemic average for job openings was around 7 million, so we’re close to historical normal now. The “help wanted everywhere” narrative — where workers could quit on a whim and have five offers by Friday — is officially over. Companies are now focused on productivity gains instead of just adding more heads.

What does this mean for investors? Labor market tightness was a key driver of wage pressure and inflation. A cooling labor market with fewer openings can ease that pressure. Many professional investors watch job opening trends as an indicator of labor cost inflation ahead — fewer openings typically mean less wage pressure down the line.

Bottom Line: The jobs market is shifting from red-hot to rational. Fewer openings could be a relief for companies’ bottom lines — and a cooling force on inflation.

Source: Bureau of Labor Statistics