Signs of Strength in Labor Market: Job Openings Up in August | CNN Business

The number of jobs available in the US rose in August, signaling an undercurrent of strength in the labor market at a time when its vitals are being carefully watched by the Federal Reserve.

According to new data released Wednesday by the Bureau of Labor Statistics, there were an estimated 8.04 million job openings in August, up from an upwardly revised 7.71 million in July.

The latest tally equates to 1.1 available jobs for every person looking for one, BLS data show.

Economists had expected the number of available jobs to fall to 7.682 million, a slight increase from July's preliminary total, according to FactSet consensus estimates.

The latest Job Openings and Labor Turnover survey report kicks off a week full of critical economic data for the U.S. labor market, with Friday's jobs report finally out. The health of the job market has been a top concern for the Fed, which last month cut its benchmark interest rate for the first time in four years.

The latest JOLTS report — which also tracks hiring, attrition, layoffs and other turnover activity — gives an indication that there is some underlying stability in the labor market despite slower overall job growth.

The industries seeing the biggest jump in openings are construction; transportation, warehousing and utilities; and state and local government (except education). Alternatively, available jobs have shrunk in many service sectors, including finance, and arts and entertainment.

“The increase in job openings is encouraging, but we have several months to work together to improve job opportunities,” Ryan Sweet, chief U.S. economist at Oxford Economics, told CNN in an interview. “The key to the labor market depends on the hiring rate and the layoff rate.”

The number of layoffs fell in August, showing that the worrisome job-cutting program does not appear to be accelerating. However, the recruitment process continued to stall.

“The layoff rate is still very low, but it could turn on a dime, and I think that's what worries the Fed,” Sweet said. “I would probably describe the labor market as 'so-so.' It's not creating enough jobs to keep up with labor force growth.”

Hiring has slowed for a number of reasons, including shrinking corporate profit margins, uncertainty surrounding the election, as well as overhiring in industries such as health care and leisure and hospitality, Sweet said.

Also, monetary policy works with a lag and lower interest rates can take some time to start working through the economy.

Tuesday's JOLTS report also found that workers also appear to be taking a wait-and-see approach.

As the labor market slows and opportunities shrink, more workers are being laid off: The number of people voluntarily leaving jobs fell to 3.084 million, the lowest level since September 2020.

Outside of the pandemic, the 1.9% layoff rate, which measures voluntary separations as a percentage of total employment, was the lowest since 2015.

“We are still months away from a potentially strong job market, and workers are leaving their jobs at a slow pace to realize this,” Robert Frick, corporate economist at Navy Federal Credit Union, wrote in comments issued Tuesday.