U.S. job openings dropped in November to the lowest level in more than two years, the latest evidence that the Federal Reserve’s interest-rate hike campaign is continuing to cool the labor market.

The Labor Department said Wednesday there were 8.79 million job openings in November, a decrease from the upwardly revised 8.85 million openings reported the previous month. Economists surveyed by Refinitiv expected a reading of 8.85 million.

It marked the lowest level for job openings since March 2021.

The Federal Reserve closely watches these figures as it tries to gauge labor market tightness and wrestle inflation under control. 

The central bank responded to the inflation crisis and the extremely tight labor market in the past two years by raising interest rates at the fastest pace in decades. Officials approved 11 rate hikes in the span of just 16 months, lifting the federal benchmark funds rate to the highest level since 2001. Policymakers have since signaled that their tightening campaign has likely come to an end amid growing signs that inflation is subsiding.

The latest labor data reinforces the notion that the job market, and inflation, are both slowing.

“The job market is cooling as illustrated by fewer openings,” said Jeffrey Roach, chief economist at LPL Financial. “The Fed is likely in a sweet spot as they prepare markets for an upcoming cut in rates.”

Still, job openings remain historically high. Before the COVID-19 pandemic began in early 2020, the highest on record was 7.6 million. There are roughly 1.5 jobs per unemployed American. 

The number of Americans quitting their jobs, meanwhile, ticked lower to 3.5 million, or roughly 2.2% of the workforce, indicating that workers are becoming less confident they can leave their jobs and find employment elsewhere.

Switching jobs has been a windfall for many workers over the past year: Job-switchers saw their real hourly wage increase 6.2% in November, compared to a 5.3% pay bump for workers who stayed in the same job, according to recent Atlanta Fed data.

The report also indicated that layoffs were largely unchanged last month, hovering around 1.5 million.