Job Openings Drop to Lowest Level Since 2020 — What’s Going On in the Labor Market?

If you’ve been following the news about the economy lately, there’s a new data point making headlines: job openings in the U.S. have fallen to their lowest level in more than three years. According to the Labor Department’s latest report, openings dipped from 6.9 million in November to 6.5 million in December — the lowest level since 2020. (U.S. Bureau of Labor Statistics)

That sounds like a big shift — and it is. But as usual with the jobs market, the story isn’t just about the numbers. It’s about what those numbers mean for workers, businesses, and the economy as a whole.

Let’s dig in.

What the Numbers Show

Here’s the key takeaway:

• Job openings fell to 6.5 million in December, down from 6.9 million in November.

• This is the lowest total since early 2020, before the pandemic upended the labor market.

• The drop was broad — affecting multiple industries and regions.

The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) tracks openings, hires, and separations, giving us a snapshot of how much demand there is for workers. A fall in openings doesn’t necessarily mean layoffs are rising — it can also reflect slower hiring or employers holding off on adding new positions.

A drop in job openings can signal a few different things:

1. The Labor Market Is Cooling Off

After several years of strong demand for workers — where jobs often outnumbered available workers — this decline suggests that employers are becoming more cautious.

That could be due to:

• Economic uncertainty

• Slower consumer spending

• High borrowing costs

• Businesses optimizing staff instead of expanding

A cooling labor market doesn’t automatically mean a recession is coming, but it can reflect a shift away from the red-hot job market we saw in 2021–2023.

2. Workers Might Have More Leverage (in Some Industries)

When there are more openings than workers, employees have leverage — meaning they can negotiate for better pay, benefits, and flexibility. But when openings decline, employers don’t feel the same hiring pressure.

That could lead to:

• Slower wage growth

• Fewer incentives to attract new hires

• Less competition for talent

Of course, this varies widely by industry. Healthcare, tech, hospitality, and skilled trades may all feel different effects.

3. Not All Job Data Is Moving the Same Way

It’s important to remember that openings are just one piece of the labor picture.

In many sectors:

• Hires are still happening

• Layoffs remain relatively low

• Quit rates are above pre-pandemic levels

So even as openings drop, workers may still have opportunities — especially if they have in-demand skills.

What This Means for Small Businesses

If you own or manage a business, this shift in openings gives you a chance to reflect strategically.

Here’s how:

✔ Don’t Panic — Longer Hiring Runs Both Ways

A decrease in job openings doesn’t mean workers disappear. It may mean:

• Workers are staying in jobs longer

• Competition for talent feels less intense

• Some roles are harder to fill than others

Instead of reacting to headlines, look at your own hiring trends:

• Are positions filled quickly?

• Do you have trouble retaining people?

• Are certain roles staying open longer?

That’s real data you can act on.

✔ Focus on Retention — Especially Now

When job openings fall, retaining your best employees becomes even more important. Consider:

✨ Competitive pay and benefits

✨ Flexible schedules where possible

✨ Opportunities for growth and training

✨ Clear communication and culture

Investing in your current team often pays off more than constantly recruiting new hires.

✔ Sharpen Your Hiring Strategy

Just because job openings overall are down doesn’t mean you stop hiring. But you might:

📌 Tighten your job descriptions

📌 Promote openings in niche or local channels

📌 Emphasize what makes your workplace special

📌 Speed up your interview and onboarding processes

Smart hiring now can keep you ahead of competitors who are slower to adapt.

What This Means for Job Seekers

For workers, this shift can also have mixed implications:

🔹 Good news: It doesn’t mean jobs disappear — it just means fewer new postings.

🔹 Good news: High-demand skills still command opportunities.

🔹 Caveat: Negotiating power might soften in more crowded job fields.

If you’re job hunting right now:

🟨 Focus on skills that employers need (tech, healthcare, trades, etc.)

🟨 Keep your resume and LinkedIn fresh

🟨 Network strategically with people in your industry

And most of all — don’t be discouraged by a headline.

Looking Ahead: Where Do We Go From Here?

Economists and labor experts interpret this kind of data cautiously — because the jobs market moves in cycles.

A dip in openings doesn’t guarantee a downturn — but it does suggest a shift toward a more balanced market.

That can be good for:

✔ Employees seeking stability

✔ Employers managing growth sustainably

✔ Markets finding equilibrium

The key is to pay attention to multiple indicators — not just one number.

A drop from 6.9 million to 6.5 million job openings is worth noticing — but it’s not the full story. The labor market is big, complex, and always evolving.

For small businesses, it’s an opportunity to sharpen hiring methods, reinforce culture, and invest in retention. For workers, it’s a reminder to keep skills relevant and seek roles that bring both value and satisfaction.

Economies move fast — but a thoughtful response, grounded in real data and strategy, keeps you a step ahead.