A sign of strength in the labor market: Job openings increased in August
US Job Openings Increase in August, Signaling Labor Market Strength #
The number of available jobs in the US grew in August, indicating an underlying strength in the labor market at a time when it is under close scrutiny by the Federal Reserve.
Job openings in August reached an estimated 8.04 million, up from a revised 7.71 million in July. This equates to 1.1 available jobs for every job seeker.
The increase in job openings comes during a week of critical economic data releases for the US labor market, culminating in the Friday jobs report. The health of the job market has become the top concern for the Fed, which recently cut its benchmark interest rate for the first time in four years.
Despite slowing overall job growth, the latest report suggests some underlying stability in the labor market. Industries experiencing the largest increases in openings were construction; transportation, warehousing and utilities; and state and local government (excluding education). Conversely, available jobs decreased in many service sectors, including finance, and arts and entertainment.
The number of layoffs dropped in August, indicating that job-cutting activity is not escalating. However, hiring activity continued to be sluggish. The labor market has been described as “so-so,” not creating enough jobs to keep up with labor force growth.
Several factors have contributed to the slowdown in hiring, including compressed corporate profit margins, election uncertainty, and over-hiring in certain industries like health care and leisure and hospitality. The effects of lower interest rates may take time to impact the economy.
Workers appear to be taking a cautious approach as well. The number of people voluntarily quitting their jobs fell to 3.084 million, the lowest level since September 2020. Excluding the pandemic period, the 1.9% quits rate is the lowest seen since 2015.
Experts suggest that a robust job market may still be months away, and workers seem to understand this, continuing to quit their jobs at a slower pace.