If you have followed the Department of Labor’s monthly payrolls and unemployment reports, you probably realized that the endless strength of the jobs market is now looking a bit less strong. And now we have confirmation from the Bureau of Labor Statistics (BLS) that the number of job openings is part of the problem.
The BLS monthly Job Openings and Labor Turnover Survey, so-called JOLTS report, has a one-month lag, so it measures Augusts openings and turnovers, as opposed to last Friday’s Employment Situation report that was focused on September.
The JOLTS report is never a market-moving report, but this should be at least one bit on confirmation that the jobs market is not as strong as it has been recently. If you interpolate the actual BLS numbers, it looks pretty clear that the jobs market is now less robust than in prior quarters.
The total number of job openings was 5.443 million in August. July’s total job openings figure was revised lower, from 5.871 million to 5.831 million. On a net basis, that means that there were 6.65% fewer job openings at the end of summer than in the mid-summer report.
Wednesday’s JOLTS report gets worse on other metrics as well. Hiring had previously been on the rise, but it slowed by almost 1% in August. Hires were 5.2 million and separations were 5.0 million.
Here is what should stand out. The six-month average of payrolls gains from last Friday was the slowest reading going back to 2012. Now the number of job openings is the lowest since last December. This is even more suspect when you consider that the hiring number was more impressive as the fourth highest reading of 2016.
The number of job openings fell to 3.6% in August from 3.9% in July. Hiring rates were more or less unchanged at 3.6%. The separations rate fell to 3.4% in August from 3.5%, while the quits rate was more or less unchanged at 2.1%. Layoffs were unchanged at 1.1%.
Some economists will say these numbers still look healthy. Others will point out that they are lower. Maybe that means that the jobs market has peaked, or maybe that means this is now just a function of being at full employment.
Either way, the numbers confirm slowing jobs growth trends for August and September alike. Now let’s consider what the rising wages of 2.6% seen in September versus a year ago will translate to. We may have seen the jobs market peak — and the Federal Reserve still wants to keep jawboning about the need or desire to raise interest rates.