In August, the number of job openings in the United States surged to a three-month high, contradicting other data that suggests labor demand is slowing. The Bureau of Labor Statistics reported that job openings increased from the revised 7.71 million in July to 8.04 million in August. This figure exceeded the median estimate of 7.69 million economists surveyed by Bloomberg.
The hiring rate dropped to 3.3%, matching its lowest level since 2013, excluding the early months of the 2020 pandemic. The quits rate also fell to 1.9%, the lowest since June 2020, indicating a decline in workers' confidence in finding new jobs. Despite the rise in job openings, recent data shows employers are slowing down their hiring pace.
The Federal Reserve reduced interest rates by 50 basis points in September to counteract this slowdown. They have indicated that if weakness persists, another 50 basis point reduction could occur in November. The September non-farm payroll report, due for release soon, is expected to show a slight acceleration in hiring while the unemployment rate remains steady, according to economists' median forecasts.
Following the data release, U.S. stock markets extended their losses, and Treasury yields continued to decline. The ratio of job openings to unemployed persons, a key metric monitored by the Federal Reserve, remained around 1.1, its lowest level in three years. This ratio peaked at 2:1 in 2022.
Significant declines in hiring were noted in retail trade, transportation, and warehousing sectors.
