Job Openings and Quits Show Signs of Less Robust Job Market
The media reports that recession risks are rising every day. If a recession is going to arrive, it’s going to take a major blow to the consumer — and the number one blow to consumers is around jobs. According to the U.S. Bureau of Labor Statistics, there were 7.051 million job openings in America on the last day of August. This data is a month ahead of the latest monthly payroll gains for September by a month, but the Job Openings and Labor Turnover Summary (“JOLTS”) is used as one additional tool of economists and job seekers to evaluate the strength of the underlying job market.
The prior number of job openings, for July, was revised down to 7.174 million from the preliminary 7.217 million. Econoday’s consensus estimate was 7.186 million job openings.
Over the course of the month, hires edged down to 5.8 million and separations were little changed at 5.6 million. The job openings rate was 4.4%. Within the separations, the so-called quits rate was 2.3%, and the layoffs and discharges rate remained 1.2%.
The job openings level decreased in nondurable goods manufacturing by 49,000 positions and by another 47,000 in information. The rate of hires (5.8 million) was shown to be down by 199,000 in August from July, led by a drop of 219,000 in the private sector.
As for the quits rate, this measurement offers a barometer of workers’ willingness or ability to leave a job, either for a better job or for an opportunity that may be more preferable for other reasons.
The number of quits was down by 142,000 to 3.526 million in August, led by a drop of 144,000 private sector total number of quits. Within the quits, professional and business services saw a drop of 76,000, and the “other services” segment showed a decline of 67,000.
Where things look more representative of a drop is in the annual comparisons. With 7.051 million job openings and 6.32 million private sector job openings at the end of August of 2019, both are lower than 7.342 million total job openings and lower than the 6.611 million private sector openings in August of 2018. The quits rate of 3.526 million (total) was lower than the 3.668 million quits in July, but it was still higher than the 3.473 million total quits from August of 2018.
All in all, the number of jobs remains quite attractive for the American labor force, and enough people are still willing to demonstrate jobs mobility, illustrated by the quits rate. Still, these numbers show a slightly less robust jobs market in the eyes of the workforce, and there is a continued trend lower in the number of job openings.