In the United States, job openings in September declined significantly to 7.4 million, their lowest level since January 2021, according to the September Job Openings and Labor Turnover report, published by the Bureau of Labor Statistics (BLS).
This figure represents a decline from the revised August total of 7.86 million, indicating a sizable slowdown in the labor market after years of growth.
Economists had forecast the number of job openings to be closer to eight million, so the drop was greater than anticipated.
Job Openings – Largest & Smallest Decreases
The healthcare, social assistance, and government sectors (both state and local) saw the most significant decreases in job openings.
Meanwhile, the finance and insurance sector experienced some growth in vacant positions – 85,000 more openings in September.
Hiring in late September, with 5.6 million hires, remained stable. The hiring rate rose marginally to 3.5%. This means that while fewer vacant positions were available, employers are still adding people to their workforce.
Yahoo Finance quoted Gregory Daco, EY Chief Economist, who said:
“What we’re seeing is a gentle cooling of labor demand and less labor supply absorption, nothing catastrophic.”
In other words, the labor market is slowing but not crashing; employers are still hiring, albeit at a slower rate than before.
Separations: Quits, Layoffs, Discharges, and Other Exits
A total of 5.2 million American employees left their jobs in September, which remained unchanged from August.
-
Quits
The ‘quits’ figure, which is often viewed as a sign of worker confidence, remained relatively steady at 3.1 million (a drop of just 1.9%).
This was lower than a year ago, which suggests that workers are slightly confident about finding new opportunities if they leave their current jobs.
The U.S. quits rate was the lowest since the summer of 2015 (excluding 2020). As opportunities become scarcer, it seems that workers might be valuing job security more.
-
Layoffs & Discharges
Layoffs and discharges rose to 1.8 million in September, an increase of 238,000 compared to September 2023.
The durable goods manufacturing sector reported the highest increase (adding 46,000 layoffs). Conversely, state and local government sectors (excluding education) saw a slight decrease in layoffs.
A Pre-Pandemic-Style Labor Market?
Fewer job openings and the steadiness in quits suggest a shift towards a pre-pandemic-style labor market, where job growth and movement are more moderate.
American employees are currently more cautious, figures suggest, as fewer of them are leaving their positions voluntarily.
Newsweek quoted Carl Weinberg and Rubeela Farooqi of High Frequency Economics, who said:
“Workers (are) not as confident as they have been about being able to find a job if they quit without another to step into. There is no signal here of any sudden collapse of the labor market or any imminent recession. The labor market is softer, sure, but it is not imploding.”
Whether this shift might affect consumer sentiment or consumer spending remains to be seen. Consumers tend to become more cautious with their finances if job security feels less certain.
The Federal Reserve, which is considering further actions on interest rates, is closely watching these developments. A cooling labor market should ease inflationary pressures without risking a full-blown recession.
Summary
The September Job Openings and Labor Turnover report suggests that the U.S. labor market is moderating.
Job openings have decreased, and layoffs have increased slightly. However, the situation is far from dire.
Economists believe we are seeing a gradual return to a more balanced and sustainable level of employment growth.
Discover more from Market Business News
Subscribe to get the latest posts sent to your email.