Minneapolis(CNN)There’s a slight chill running through the US labor market, but the temperature is still too high for the Federal Reserve.
The number of job openings in the United States fell to 10.8 million in January, down from an upwardly revised 11.23 million in December, the Bureau of Labor Statistics reported Wednesday as part of its monthly Job Openings and Labor Turnover Survey, or JOLTS.
The consensus estimate from economists was for 10.5 million available positions in January, according to Refinitiv.
layoffs surged to 1.72 million from 1.48 million, and quits dropped to 3.89 million from 4.09 million.
Those shifts point to a cooling labor market. However, the continued imbalance between worker supply and demand means the US job market remained tight in January — and that’s not what the Federal Reserve is looking for in its efforts to cool the economy.
“While the January JOLTS report shows job openings are heading in the right direction for the Fed, the decline is far too modest to convince that labor market conditions are cooling enough to bring down inflation,” Oxford Economics economists wrote in a statement issued Wednesday. “The Fed will put more weight on Friday’s employment report, but signs continue to point towards [quarter-point] rate hikes at each of the next three [Federal Open Market Committee] meetings.”
The Fed remains highly attuned to the monthly JOLTS report as the data can serve as a proxy for labor market demand. Fed officials have expressed concern that a tight labor market could keep upward pressure on wages and, in turn, inflation.
“Quits, they’re inching down,” Kris Mitchener, a professor economics at Santa Clara University, said in an interview. “Quits are important because they tell us something about how workers are perceiving their relative bargaining positions in the labor market and [whether] they have outside options.”
In January, there were nearly 1.9 available jobs for every job seeker.