U.S. Labor Market: Stagnation Amid Economic Uncertainty

U.S. job openings marginally increased in October, despite economic uncertainty caused by tariffs. Hiring dropped, and job resignations hit a five-year low. Fed is expected to cut interest rates in response. Labor market stagnation persists due to reduced immigration and AI adoption, affecting entry-level jobs.

Job openings in the U.S. saw a slight increase in October, following a significant surge in September, according to the Labor Department's JOLTS report released Tuesday. Despite this rise, hiring slowed and job resignations dipped to their lowest level in five years, indicating lingering economic uncertainty associated with tariffs.

Economists anticipate that the Federal Reserve will reduce interest rates by another 25 basis points to range between 3.50% and 3.75%, aiming to preemptively address labor market weaknesses. This move marks the third rate cut this year, aligning with ongoing concerns about the slowing job market and inflation above the 2% target.

The labor market's stagnation is exacerbated by a dwindling labor supply partly due to decreased immigration and increased use of artificial intelligence in job roles, especially at the entry-level. The unemployment rate increased to 4.4% in September, with data collection challenges during the federal government shutdown hindering full October reporting.

(With inputs from agencies.)