US Labor Market Remains Sturdy as Job Openings Stay Above 7 Million

Demand for labor slowed last month as job openings slipped to their lowest level since March, new U.S. government data released on Sept. 29 show.

The number of job vacancies declined by 256,000 to 7.079 million in August, from an upwardly adjusted 7.335 million, according to the Bureau of Labor Statistics. Economists had penciled in a reading of 7.23 million.

Last month’s drop in openings was broad-based, led by health care and social assistance, professional and business services, construction, and manufacturing.

Despite the decrease, job openings have been above 7 million for most of the year.

Supporting the oft-described “low-fire, low-hire” environment, the bureau’s Job Openings and Labor Turnover Summary found that hires and terminations had changed little across all industries.

Hires totaled 5.2 million, while layoffs and discharges were flat at 1.6 million.

The number of workers voluntarily stepping down from their positions dipped by 23,000 to 3.07 million, from an upwardly adjusted 3.089 million. The quit rate—the percentage of total employees voluntarily resigning—was 1.9 percent.

Declines in quits were concentrated in wholesale trade (negative 34,000) and state and local government education (negative 21,000). Conversely, quits jumped in nondurable goods manufacturing (28,000) and private education services (13,000).

Economists use quits as a gauge of workers’ willingness to leave their jobs and find new employment opportunities in today’s economy.

Overall, the U.S. labor market remains sturdy heading into the typically busy holiday-related hiring spree. But consumers are not as optimistic.

The latest release coincides with The Conference Board’s latest Consumer Confidence Index, which fell sharply to its lowest level since 2014.

“The combination of fewer job openings and the perception that jobs are harder to get has consumers feeling as bad as they did in early 2021,” Jeffrey Roach, chief economist for LPL Financial, said in a note emailed to The Epoch Times.

 “Although this doesn’t jive with the latest payroll report, it does show consumers are getting more cautious about the outlook, which could dampen holiday sales.”

Labor Data Week

August’s job openings kick off a week of various labor market indicators, including the highly anticipated September jobs report.

Early consensus estimates suggest the U.S. economy added 84,000 new jobs, and the unemployment rate held steady at 4.1 percent.

The upcoming nonfarm payrolls report follows the strong 162,000 positions added last month.

But economic observers will be combing through further details inside the bureau’s jobs report, says Jay Woods, chief market strategist at Freedom Capital Markets.

“A stronger-than-expected report, particularly one with firm job growth, wages and unemployment holding near 4.1%, should keep another Fed rate hike firmly on the table,” Woods told The Epoch Times in an emailed note.

“Conversely, payroll growth below 50,000 or an unemployment rate rising to 4.2 percent or 4.3 percent could give the Fed reason to pause after September’s hike.”

Once again, he added, Wall Street will be searching for a Goldilocks report whereby the numbers are neither too hot nor too cold.

The Fed, which will convene its next two-day policy meeting on Oct. 27, is expected to follow through on a second straight quarter-point interest rate hike. Officials are comfortable with current employment conditions, with the Summary of Economic Projections forecasting the median jobless rate to hold steady at 4.1 percent for the next three years.

As a result, they are keeping the price-stability side of the central bank’s dual mandate in focus.

Policymakers will obtain another glimpse of inflation when the Bureau of Economic Analysis publishes the August Personal Consumption Expenditures (PCE) Price Index on Sept. 30.

Annual PCE inflation is projected to be unchanged at 3.7 percent. Stripping out volatile energy and food components, the 12-month core PCE inflation rate is forecast to tick up to 3.4 percent, from 3.3 percent.

Meanwhile, ahead of the September jobs data, private payrolls, planned layoffs, and weekly unemployment claims will also be published this week.