New data shows corporate America’s post-pandemic hiring push is coming to an end. U.S. job openings dropped by 617,000 in October to a 32-month low of 8.73 million, the Bureau of Labor Statistics reported Tuesday.

The figure was well below consensus forecasts for 9.4 million job openings, but most economists and Wall Street leaders don’t seem worried. In fact, quite the opposite. “This report should bring abundant holiday cheer,” Indeed Hiring Lab’s director of economic research, Nick Bunker, said of the job openings data.

Bunker and many of his economist peers are optimistic amid the cooling labor market because labor market cooling is exactly the Federal Reserve’s goal in its battle with inflation. Ever since the central bank’s officials began raising interest rates to fight rising consumer prices in March 2022, they’ve warned they would need to slow the labor market.

More specifically, this year, with inflation fading steadily, the Fed has pointed to the elevated ratio of job openings to unemployed workers as a sign of an overheated labor market that must be chilled with interest rate hikes. But in October, the job openings to unemployed workers ratio fell to just 1.3 to 1, down from 2 to 1 just a few months ago.

Now many experts believe the Fed can end its interest rate hiking campaign. “The Federal Reserve could well be finished raising interest rates this cycle,” Mark Hamrick, senior economic analyst at Bankrate, said Tuesday, noting that despite Fed Chair Jerome Powell’s hawkish tone in recent speeches, “many investors and other observers believe the beginning of easing, or rate cuts, could come in 2024.”

In a sign the bond market is expecting the Fed to pivot to interest rate cuts next year, the 10-year Treasury yield fell to just 4.18% Tuesday, its lowest level since early September. That’s great news for businesses and consumers, which have struggled with rising borrowing costs for years. And it could even be a sign that a “soft landing”—when inflation fades without a subsequent recession—is on the way.

More juice for the soft landing camp

The latest job openings data has given ammunition to more optimistic forecasters on Wall Street after more than two years of heated debates about the likelihood of recession. Many experts are now convinced the latest job openings data is a sign that the economy will avoid a recession.

“The probability of a soft landing continues to rise,” Indeed’s Bunker said, noting that although job openings fell in October, corporate hiring and worker quit rates actually remained flat—“a sign that the labor market isn’t falling off a cliff.”

At the same time, although job openings have fallen sharply from their peak of 12 million in March 2022, they were still well above pre-pandemic levels in October at 8.73 million. In January 2020, for instance, there were only roughly 7 million job openings across the U.S.

There are clear signs the labor market is cooling, however, with the unemployment rate rising from a low of 3.4% in April to 3.9% last month. Bankrate’s Hamrick also said Tuesday that “further cooling in the job market is expected.” But that doesn’t mean a recession is inevitable. “While there’s been talk about an imminent recession going back to early last year [2022], the U.S. economy has remained substantially more resilient than expected,” he said.

Hamrick argued that the latest job openings data indicates the most likely scenario for 2024 is a “soft landing,” but “a mild and short recession can’t totally be ruled out.”

But the skeptics are still…skeptical

The recent labor market slowdown may be a good sign for the Fed in the near term, but if it continues for too long, a recession could be on the menu. That’s an outcome Citi economists, led by Veronica Clark, said in a Tuesday note that they fear is likely in 2024. Clark predicts the current labor market rebalancing will shift to something far worse as the lagged impact of the Fed’s interest rate hikes hits the economy, arguing job openings will fall sharply next year.

“Labor market metrics will pass ‘soft landing’ levels on their way to ‘hard landing’ ones,” she warned, noting that the recent labor market rebalance evidenced by the job openings data has coincided with rising unemployment.

Clark also cautioned that the job openings data from the BLS is “somewhat ill-defined” in the modern era of online job postings, and should therefore be taken with a grain of salt. “Much lower survey response rates post-pandemic will likely also lead to greater month-to-month volatility in the data,” she added.

Nationwide’s financial market economist Oren Klachkin fears the labor market may continue to weaken in 2024 as well, even if he admitted the latest job openings data was precisely what the Fed was looking for.

Eventually, high interest rates and tight credit conditions will force businesses to cut their workforces, hindering consumer spending, according to Klachkin. And because consumer spending makes up roughly 70% of U.S. economic growth, 2024 could be a challenging year.

“Some think the economy can avoid a recession, but we continue to envisage that restrictive Fed policy and tight credit will cause a hard landing in 2024,“ Klachkin said.

Consumers seem to be on the side of the bears, too. The Conference Board’s latest Consumer Confidence Report showed that although recession fears have dipped, roughly two-thirds of consumers still believe a recession is either “somewhat” or “very likely” to occur over the next 12 months.