October Job Openings Were Higher Than Expected. Why a Rate Cut Is Still Likely.

The JOLTS data had been delayed due to the government shutdown. (Joe Raedle / Getty Images)

Key Points

• Job openings in October reached 7.670 million, exceeding the consensus expectation of 7.117 million available positions.
• The number of hires and total job separations remained stable at 5.1 million in October, while layoffs increased to 1.85 million.
• The JOLTS report is the final piece of data about employment to be released ahead of the Federal Reserve’s Wednesday decision on interest rates.

The number of available jobs swelled in September and October, providing additional evidence that employment isn’t collapsing. But that signal of economic strength isn’t expected to prevent Federal Reserve officials from voting to lower rates at Wednesday’s policy meeting.

The Job Openings and Labor Turnover Survey report, released Tuesday by the Bureau of Labor Statistics, showed 7.670 million job openings in October, more or less in line with the estimate of 7.658 million job openings in September. Figures for both months, delayed by the government shutdown, were released at the same time.

The October number both came in much higher than consensus expectations and reversed a gradual weakening seen in recent months. Economists surveyed by Bloomberg expected openings to tick lower to 7.117 million in October. In August, during a summer slump that began in July, 7.227 million positions were available.

While investors have reasoned that the Fed is likely to cut rates partly because of concern about employment, the figures aren’t expected to bring a change of course. Prices of interest-rate futures show overwhelming odds that the bank will lower its target range for the fed-funds rate by a quarter of a percentage point to 3.5% to 3.75% on Wednesday.

“We see the stale September and October JOLTS data largely as confirmation of what we already know: the job market isn’t collapsing but it is certainly losing steam,” writes Oren Klachkin, Nationwide’s financial market economist. “We anticipate Fed officials will try to get ahead of labor market weakness with another 25bps rate cut tomorrow even as inflation remains above the 2% goal.”

The odds of a quarter-point cut were 87% on Tuesday, compared with 86% on Wednesday, according to the CME FedWatch tool.

A sign of continued weakness in the job market is that the pickup in openings in September and October hasn’t translated into more hiring. The number of people hired was little changed at 5.1 million in October, the BLS reported.

Total job separations were also relatively unchanged, but under the hood, workers were staying put even as layoffs rose. The number of people quitting fell to 2.9 million in October, from 3.1 million in August and September

The number of layoffs rose to 1.85 million in October from 1.78 million in September and 1.73 million in August. The rise in layoffs and workers’ limited willingness or ability to leave jobs could provide Fed officials seeking a rate cut with a bit more ammunition.

A positive indication, worth considering because the JOLTS data can be volatile from month to month, is that the job openings rebounded to 7.7 million for two consecutive months, writes Stephen Stanley, Santander’s chief U.S. economist. October’s number of openings also was roughly even with the year-ago reading and was well ahead of the year-to-date 2025 average.

“Once again, as with the September payroll reading and recent initial jobless claims figures, the hard data…convincingly show that, just as was the case last year, after a lull in the summer, labor market indicators seem to be perking up in the fall,” Stanley says. A quirk with seasonal adjustments “appears to be making the labor data look worse in the summer months and, for the second year in a row, the FOMC and most economists seem to have misinterpreted the situation.”

Tuesday’s job openings measure is roughly in line with recent readings of the Indeed Job Postings Index, which ticked up in November.

In addition to the JOLTS data, the payroll processor ADP released weekly payroll data that showed a slight upswing. For the four weeks ending Nov. 22, private employers added an average of 4,750 jobs a week. This comes after four straight weeks of negative weekly estimates.

While Tuesday’s flurry of data are unlikely to prevent the Fed from cutting, they could push officials to opt for an extended pause, writes Matthew Martin, senior U.S. economist at Oxford Economics.

Economists and investors are placing more emphasis on the JOLTS data because it the last of a series of delayed jobs reports to be published ahead of the Federal Reserve’s policy meeting on Wednesday.

Oxford’s Martin noted that difference between the number of hires and separations in October, which is used as a proxy for the change in nonfarm employment, was 99,000. This suggests the 119,000 gain in nonfarm payrolls reported by the BLS for September is sustainable.

The BLS is set to release the delayed October and November nonfarm employment figures on Dec. 16.

Write to Megan Leonhardt at megan.leonhardt@barrons.com