August job openings rise; new Fed rate hike possible
Report: Employment opportunities increase after 3-month decline, worrying stock market investors
The number of job openings rose in August, the Labor Department reported Tuesday, after three consecutive months of falling numbers.
There were 9.6 million job openings in the month, 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 increase was larger than expected.
Investors balked at the fresh numbers, fearful that they would signal to the Federal Reserve that the economy still was running too quickly, necessitating even higher interest rates to slow it.
Job openings are closely monitored by the Fed, which has tried to fight inflation over the past 19 months by increasing interest rates, aiming to cool the economy and reduce labor demand, though it took a pause at its most recent meeting.
“The Fed won't make policy decisions based on one JOLTS report, but it does keep the risks tilted toward another rate hike,” Nancy Vanden Houten, lead U.S. economist for Oxford Economics, said of the August increase in job openings.
The S&P 500 slumped 1.4%, while the yield on the 10-year Treasury bond, a crucial benchmark interest rate around the world, rose 0.1 percentage points to 4.8%, indicative of investors' betting on stronger growth going forward.
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. Openings rose in August, but because unemployment also ticked up, the number of openings per unemployed worker was flat, at about 1.5.
“The labor market is tight, but it's easing, and gracefully so,” said Mark Zandi, the chief economist at Moody's Analytics. He said 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.
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.
The rate of people quitting their jobs, a measure of workers' confidence in the labor market, was unchanged in August at 2.3%.
Layoffs also have been flat, suggesting that employers are reluctant to part ways with workers in a tight labor market. And though overall inflation sped up, driven largely by increases in fuel costs, the Fed's preferred measure of inflation slowed.
Despite the moderate uptick in job openings, there still are some potential headwinds on the horizon.
Because there's a lag in the JOLTS report, labor stoppages like the United Auto Workers union strike, which now involves about 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 higher 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.
September's jobs report will be released Friday by the Labor Department.