Wednesday, November 6

JOLTS Report Shows Job Openings Rose in August

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.

Investors balked at the fresh numbers, fearful that it would signal to the Fed that the economy was still running too quickly, necessitating even higher interest rates to slow it. The S&P 500 slumped 1.3 percent, while the yield on the 10-year Treasury bond, a crucial benchmark interest rate around the world, rose 0.1 percentage points to 4.77 percent, 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 around 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 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.

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.

What matters more than the JOLTS report is the Fed’s projection of the unemployment rate, said Preston Mui, a senior economist at Employ America, a research and advocacy group focused on the job market. 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, Mr. Mui 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.

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.

Joe Rennison contributed reporting.