Hirings see small increase as layoffs continue
US job openings increased in August as there was a surge of white-collar job postings, as reported in an article by Bloomberg.
What is the current state of job openings and labor turnover?
In the report showing the results of the job openings and labor turnover survey by the Bureau of Labor Statistics (BLS), it was revealed that the number of job openings had noticeably increased from July’s metrics. August saw the 8.92 million available job positions increase to 9.61 million.
The increase in job openings showed that there were significantly more postings for professional and business services (+509,000), finance and insurance (+96,000), state and local government education (+76,000), non-durable goods manufacturing (+59,000), and federal government (+31,000).
Despite this increase in job openings, there were still problems within the labor market.
“August’s surge in job openings does little to change our view that the labor market is loosening,” said Stuart Paul, an economist from Bloomberg.
“Skills mismatch appears to be an increasingly difficult problem for firms with job openings, as hiring and wage growth have been slowing even with vacancies still high,” he continued.
The number of employees hired saw little change at 5.9 million, with the rate remaining at 3.7%. In July, the number was 5.8 million.
The quits rate, which measures the number of those who leave jobs voluntarily as a share of total employment, remained at 2.3%. This matched the lowest rate since 2020, implying that people were less confident about having the ability to find another job in the current market.
However, there were some economists that showed skepticism over the reliability of the survey as it had a low response rate which involved a stratified random sample of 21,000 nonfarm business and government establishments. This was further amplified by stories of employers who did not respond to jobseekers as some firms posted jobs that they did not intend to fill.
The government and the labor market
The Federal Reserve continues to watch over current trends within the labor market. The officials at the central bank expect a trend of more job openings to continue, which will help ease the pressure on prices.
However, persistent strengthening within the labor market may lead the Federal Open Market Committee to raise rates.
“With job openings remaining well above levels recorded prior to the pandemic and moving in the wrong direction in August, these data support a higher for longer message on rates from the Fed and will likely keep the FOMC open to another rate hike this year,” said Rubeela Farooqi, chief US economist at High Frequency Economics.
“We expect the Fed to look at the larger trend across a host of labor-market indicators, which indicate softening,” said Paul.
Last week, data showed that a key gauge of underlying inflation saw a rise in August at a monthly pace that was the slowest it has been since late 2020.
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