The News
The number of job openings rose in August, the Labor Department reported on Tuesday, after three consecutive months of falling numbers.
There were 9.6 million job openings in August, up from a revised total of 8.9 million in July, according to seasonally adjusted figures in the latest Job Openings and Labor Turnover Survey, known as JOLTS. The rate of people quitting their jobs, a measure of workers’ confidence in the labor market, was unchanged at 2.3 percent.
Construction workers at an apartment building in Oakland, Calif.Credit…Jim Wilson/The New York Times
Why It Matters: The economy nears prepandemic measures.
Job openings are closely monitored by the Federal Reserve, which has tried to fight inflation over the past 19 months by increasing interest rates. Inflation picked up in August, but the Fed didn’t raise rates at its most recent meeting.
“We’re taking advantage of the fact that we have moved quickly to move a little more carefully now,” Jerome H. Powell, the Fed chair, said during a news conference on Sept. 20 after Fed officials met.
Job openings have gradually come down from the 12 million recorded in April 2022, while the rate of workers leaving their jobs is down by nearly a percentage point, approaching what it was right before the pandemic.
“The labor market is tight, but it’s easing, and gracefully so,” said Mark Zandi, the chief economist at Moody’s Analytics. He added that slowdowns in monthly job growth, wage growth and hours worked, along with businesses using fewer temporary workers, all point to a cooling of the labor market.
And so far, the labor market and economy have managed to throttle back without a big jump in unemployment, indicators of a so-called soft landing.
Layoffs have also been flat, suggesting that employers are reluctant to part ways with workers within a tight labor market. And though overall inflation sped up, driven largely by increases in fuel costs, the Fed’s preferred measure of inflation actually slowed.
Background: A resilient economy faces some headwinds.
Despite the moderate uptick in job openings, there are still some potential headwinds on the horizon.
Because there’s a lag in the JOLTS report, labor stoppages like the United Automobile Workers union strike, which now involves around 25,000 workers, are not captured in the data. And though a government shutdown was narrowly avoided over the weekend, one could happen next month, potentially taking thousands of government employees off payrolls and sapping consumer spending.
Other factors that indicate softening demand are the resumption of mandatory student loan repayments and heightened oil prices, which have in turn spooked the stock market. The economy, which had a strong third quarter of growth, could see a slowdown to close the year.
“I don’t think this changes much for the Fed,” said Preston Mui, a senior economist at Employ America, a research and advocacy group focused on the job market.
What matters more than the JOLTS report is the Fed’s projection of the unemployment rate, Mr. Mui said. The Fed last month revised its median estimate of unemployment by the end of 2023 to 3.8 percent, down from a June projection of 4.1 percent. That suggests the Fed does not view a tight labor market as a problem it needs to fix with further rate increases, he said.
Mr. Zandi cautioned against declaring a soft landing until the Fed starts to roll back interest rates. But given the gradual slowdown so far, and with financial conditions tightening overall, he said the Fed should be pleased with its progress.
What’s Next: The September jobs report on Friday.
September’s jobs report will be released on Friday by the Labor Department.
The consensus estimate is that the economy added 170,000 jobs in September, according to Bloomberg, and that the unemployment rate will decline to 3.7 percent from 3.8 percent.
