The numbers: Job openings snapped back in August and rose to 9.6 million, reflecting a robust appetite for labor in light of a steadily growing U.S. economy.
Job listings rebounded from a revised 8.9 million in July, the Labor Department said Tuesday. That was the lowest level in almost two and a half years.
The number of job openings is seen as a sign of the health of the labor market and the broader U.S. economy. Economists polled by the Wall Street Journal had forecast job listings to total 8.8 million.
Job postings have dropped from a record 12 million last year, but they are still well above pre-pandemic levels.
Senior Federal Reserve officials had been hoping the labor market would cool considerably by now. They worry a tight labor market — too many jobs and not enough workers — could keep upward pressure on wages and make it harder to tame inflation.
There were other signs the jobs market is softening, though.
The number of people quitting jobs, meanwhile, was basically flat at 3.6 million and totaled less than 4 million for the seventh time in the last eight months.
People quit less often and tend to stay put when the economy weakens and jobs become harder to find.
Job quitters had climbed to as high as 4.5 million just a little more than a year ago.
Key details: Job openings surged at white-collar professional businesses (509,000). They also increased in finance and insurance, public education and manufacturing.
While many openings are never actually filled, economists view the trend in job postings as a rough gauge of how strong the labor market is.
The number of job openings for each unemployed worker was unchanged at 1.5 in August. While the ratio is down from a peak of 2% in 2022, the Fed wants to see it fall back to pre-pandemic norms of around 1.2 or so.
The so-called quits rate among private-sector workers, meanwhile, was flat at 2.5% and was back at 2019 levels. It peaked at 3.3% a little over a year ago.
The U.S. is forecast to add a solid 170,000 new jobs in September. The jobs report comes out on Friday.
Big picture: Businesses are not hiring people in droves like they were a year ago, but they aren’t laying many people off, either. Good help is hard to find amid the worst labor shortage since World War II.
Economists and senior Fed officials are increasingly convinced they can slow inflation through higher interest rates without triggering a major surge in unemployment. Typically higher borrowing costs depress the economy and lead to major job losses.
Looking ahead: “The Fed won’t make policy decisions based on one [job-openings] report, but it doesn’t keep the risks tilted toward another rate hike,” said lead U.S. economist Nancy Vanden Houten of Oxford Economics.
Market reaction: The Dow Jones Industrial Average
DJIA
and S&P 500
SPX
fell in Tuesday trades.
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