U.S. job openings hit eight-month low, labor market still strong
U.S. job openings fell to an eight-month low in August and hiring was little changed, suggesting some easing in labor market conditions amid an aging economic recovery.
Still, details of the Labor Department’s monthly Job Openings and Labor Turnover Survey (JOLTS) report published on Wednesday continued to point to a solid jobs market, with a steady rise in the number of people voluntarily quitting their jobs and declining layoffs.
Job openings, a measure of labor demand, declined 388,000 to a seasonally adjusted 5.4 million, the lowest level since December, after surging to a record high in July. That pushed down the jobs openings rate three-tenths of a percentage point to 3.6 percent, also the lowest reading since December.
“These data can be volatile and the openings rate is still fairly high, so it is too early to tell whether this is a signal or just the noise of volatile monthly data,” said John Ryding, chief economist at RDQ Economics in New York.
“However, if this drop is sustained, it could be a sign of increased caution on the part of businesses.”
The JOLTS report is one of the job market metrics on Federal Reserve Chair Janet Yellen’s so-called dashboard. Fed officials view the labor market as being at or near full employment.
The U.S. central bank is widely expected to increase interest rates in December, having kept borrowing costs steady over course of the year because of persistently low inflation.
The decline in job openings in August was led by professional and business services, where vacancies fell 223,000. Job openings in the durable goods manufacturing industries decreased 29,000, and dropped 28,000 in the arts, entertainment and recreation sector.
“The bigger concern in the data is that openings declined year-over-year in some high-wage industries, like finance, professional services, and information,” said Jed Kolko, chief economist for job site Indeed in San Francisco.
“Plus, last Friday’s jobs report showed slower job growth in higher-wage industries. These factors are worth watching.”The number of hires was little changed at 5.2 million in August, keeping the hiring rate steady at 3.6 percent.
Job growth is slowing, with nonfarm payrolls increasing 156,000 in September. Employment growth has so far this year averaged 178,000 jobs per month, down from an average gain of 229,000 positions per month in 2015.
With the bulk of the labor market slack largely absorbed and the economy’s recovery from the 2007-09 recession aging, the slowdown in payrolls growth is normal. Fed Chair Janet Yellen has said the economy needs to create about 100,000 jobs a month to keep up with population growth.
Layoffs slipped to 1.62 million in August from 1.64 million in July, the JOLTS report showed. About 3.0 million Americans quit their jobs in August, maintaining a recent trend. The quits rate, which the Fed looks at as a measure of confidence in the jobs market, was at 2.1 percent for a third straight month.
“Nearly two-thirds of job separations are people voluntarily quitting rather than getting laid off or fired. That’s a good indicator that workers are confident they will find new jobs,” said Kolko.