Looks like the July rate hike may have been the magic number for the labor market. Job Openings fell a whopping 10% at the end of August, according to the latest data from the Bureau of Labor Statistics.
- On the last business day of August, the number and rate of job openings decreased to 10.1 million, this 1.1 million fewer job openings than the end of July.
- The largest decreases in job openings were in health care and social assistance (-236,000), other services (-183,000), and retail trade (-143,000).
Great Resignation Continues. Despite the big drop in job openings the Great Resignation does not appear to be over. The number of quits was little changed in August at 4.2 million which complicates the idea of a loosening labor market.
- Quits increased the most in accommodation and food services with 119,000 and decreased the most in professional and business services which saw a 94,000 drop.
Cracks Forming. Pretty much every part of the economy has shown signs of slowing except for the labor market. Optimists are going to look to this report as a sign that rate hikes may have finally put some cracks into the extremely tight labor market. However, the fact that quits continue to remain high does complicate matters.
White Collar Worry. Joe Weisenthal at Bloomberg wrote that this latest report could be a sign that white-collar workers are a little less confident in the labor market. “…taken literally, it would imply that service industry workers remain as confident as ever about their employment prospects, whereas those doing office jobs are getting considerably more anxious. And again, that’s consistent with the macro news, where employment overall remains strong but layoffs are gathering steam in tech and and other areas more exposed to tightening financial conditions.”
BOTTOM LINE: The world has been calling on the Fed to slow the rate hikes. If this is a sign the labor market is loosening the world may get its wish.