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Key Takeaways
- The number of job openings fell in September, but hiring increased, painting a mixed picture of the state of the labor market.
- Employers remained reluctant to lay off employees, and workers were less likely to quit, suggesting people were less confident of finding better options than their current situation.
- Concerns about the health of the labor market have prompted the Federal Reserve to cut its benchmark interest rate, and the September job openings report left expectations for another cut in November unchanged.
U.S. employers cut back on job openings in September but stayed conservative about both hiring and firing, as the overall market stayed stable but got more stagnant.
There were 7.4 million job openings in September, down from 7.9 million in August and the fewest since January 2021, the Bureau of Labor Statistics said Tuesday. That was fewer than the 8 million openings economists had expected, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal.
The dwindling number of open positions was a sour note in the Job Openings and Labor Turnover Survey report, which provides a more detailed look at the labor market’s churn.
The Details of The Labor Market
Workplaces laid off 1.8 million people, the most since January 2023, though relatively few compared to pre-pandemic levels. Fewer people quit their jobs, suggesting they were less confident of finding a new one: 3.1 million people quit in September, the fewest since August 2020.
It wasn’t all bad news for workers, though: hiring accelerated to 5.6 million, a four-month high. There were 1.1 open jobs for every unemployed worker, similar to pre-pandemic levels and far fewer than the hot job market of 2022 when there were two open jobs for each jobless worker.
“Hiring and job-to-job transitions are slowing, but firing is also very low,” Ali Jaffery, an economist at CIBC wrote in a commentary. “Part of that story likely reflects firms having staffed up enough and paired the right technology with workers, reducing their demand for additional labor at this point in the cycle but able to rely on solid productivity of their existing workforce.”
Report Is A ‘Mixed Bag’
Overall, the report was a “mixed bag” that did little to change the overall picture of the job market, Nancy Vanden Houten, lead U.S. economist at Oxford Economics wrote in a commentary.
The lack of major surprises leaves the Federal Reserve on track to cut its benchmark interest rate by 0.25 percentage points when the central bank’s policy committee next meets in November, Vanden Houten said.
The Fed began cutting rates in September to push down borrowing costs and boost the economy. Fed had held its benchmark interest rate at a two-decade high to fight inflation, but with price increases slowing down and the labor market cooling, the Fed has increasingly turned its attention to preventing a spike in unemployment. A lower fed funds rate puts downward pressure on borrowing costs for credit cards, auto loans, mortgages, and other borrowing.
Financial markets were pricing in a 99.7% chance of a 0.25 percentage-point cut in November, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data.