US job openings fall to lowest level since mid-2021

Number of available positions dropped to about 10.1 million in August

A hiring sign is displayed in Deerfield, Illinois. AP
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US job openings plummeted in August by the highest amount since early in the pandemic — probably a welcome sign for Federal Reserve officials as they seek to cool demand for workers without triggering a spike in unemployment.

The number of available positions decreased to about 10.1 million in the month from 11.2 million in July, the Labour Department’s Job Openings and Labour Turnover Survey, or Jolts, showed on Tuesday. The August level was lower than all estimates in a Bloomberg survey of economists.

The 1.1 million decline in vacancies was the biggest since April 2020 and is consistent with moderating labour demand, reflective of shifting consumption patterns, rapidly rising interest rates and a darkening economic outlook.

Stocks jumped while Treasuries advanced after the report, as traders grew optimistic the Fed may not have to be as aggressive with its interest-rate rises, given some signs that demand for workers is cooling.

While the number of vacancies remains extremely high, the ratio of openings for unemployed people retreated in August. There are about 1.7 jobs for every unemployed person, down from about two in July and the smallest ratio since November of last year.

Fed policymakers have pointed to the elevated number of job openings as a way to cool the labour market without an ensuing jump in unemployment. The decline in vacancies may help temper wage pressures that central bankers are trying to tame in an effort to extinguish rapid inflation.

Hires that were little changed during the month suggest some of the decline in vacancies reflected employers withdrawing job postings rather than filling them. The largest decreases in job openings were in health care and social assistance, other services and retail trade.

About 4.2 million Americans quit their jobs in August, a slight increase from a month earlier. The quits rate, a measure of voluntary job leavers as a share of total employment, held at 2.7 per cent.

Layoffs increased to the highest level since March 2021, though they remain historically low.

The Jolts data precede Friday’s monthly jobs report, which is currently forecast to show US employers added 265,000 to payrolls in September.

Economists are expecting the unemployment rate to hold at 3.7 per cent, right above a five-decade low, and for average hourly earnings to post another firm advance.

Updated: October 04, 2022, 6:32 PM
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