- Workers still have the upper hand, with 1.67 jobs open for every unemployed American in August.
- But that’s down from July’s 1.9, and economists see that decline further as the labor market cools.
- This means that workers may not stay in the driver’s seat for long. Some see 1.2 million jobs lost in 2023.
The drop in the number of job openings in August did not deter people from quitting their jobs and moving on, but it is certainly a sign that the labor market is slowing, analysts said.
Job vacancies fell to 10.1 million, a 6.2% vacancies rate, at the end of August from 11.2 million in July, even as the number people leaving their jobs remained roughly flat at 4.2 million, according to data from the Bureau of Labor Statistics on Tuesday. . Hirings were little changed at around 6.3 million, or a rate of 4.1%, in August, while layoffs and layoffs held steady at nearly 1.5 million, or 1%.
“Corporate caution is starting to set in,” said James Knightley, ING’s chief international economist, which explains why there are fewer job vacancies. Even so, people are still convinced that if they quit their job, they can easily find another one. For every unemployed American, there were 1.67 jobs available at the end of August.
Should people leaving their jobs be worried?
Yes. Although the number of available jobs still favors workers, it is rapidly decreasing.
The number of open jobs for each unemployed person still stands at 1.67, but is down from 1.9 in July.
Since March, quits have fallen 7%, or 15% annualized, noted Dan North, senior economist at Allianz Trade North America, a trade credit insurer.
“Most people who quit do so to get hired at another job, so the difference between available jobs and quits is also critical,” he said. “And that difference has collapsed since March, collapsing by 20%, or 42% annualized. Resigners will now have to rush into the job market before the openings dry up.”
Where were the jobs?
Almost all industries saw fewer vacancies. The only exceptions were construction, wholesale trade, and real estate and rental. Openings fell in all regions of the country, the biggest drop in the Midwest.
The hiring was split. Retail trade, accommodation and food services and health care saw an increase in hiring, but federal government, educational services and arts, entertainment and recreation declined.
Most resignations occurred in accommodation and food services (+119,000) while professional services retained their workers, with the number of resignations falling by 94,000.
What does this mean for the economy?
While jobs still look plentiful at the moment and hiring is steady, economists say the scorching labor market is cooling.
“It’s still a labor market for job seekers, with fewer benefits for workers than a few months ago,” said Nick Bunker, director of economic research at Indeed Hiring. Lab.
With a recession looming, the short-term focus is on hiring freezes and workforce reductions, KPMG said Tuesday morning in its 2022 outlook survey of 1,325 global chief executives in 11 markets. He revealed that 39% of CEOs have already implemented a hiring freeze and 46% plan to cut their workforce in the next six months.
“As vacancies become more apparent, workers may become more cautious and less inclined to leave the safety of where they hold a job and go to another employer,” Knightley said. “Wages are still high, but momentum will slow in the coming months.”‘
More workers returning:COVID anger fades: women 25-54 return to work
Recession warning:A recession is now likely in 2023. Here’s what could trigger a sharp downturn in the economy
What does this mean for the September jobs report?
“That suggests some downsides to this Friday’s payrolls report, although the rate of job creation tends to lead the unemployment rate by a few months,” said Jennifer Lee, senior economist at BMO. This means that the full effect of the job openings report is unlikely to show up in Friday’s monthly jobs report or even next month’s report.
Deutsche Bank forecasts an increase of 275,000 non-farm payrolls in September and an increase of 300,000 for JP Morgan. ING says the market is looking for 265,000.
Job cuts:Snapchat, big tech layoffs making you anxious about your job? Don’t panic. What there is to know.
Fewer jobs:Wayfair cuts nearly 900 jobs, 5% of its global workforce, amid falling sales
When will the job cuts come?
Knightly predicts that payroll numbers will remain positive this year, but decline by year end. In the first half of 2023, however, “the recessionary environment may seem more real” and we may start to see job losses.
The Federal Reserve predicted last month that the jobless rate would hit 4.4% next year, up from 3.7% in August. For the unemployment rate to be this high, the economy would have to lose 1.2 million jobs if the number of workers remained constant.
“While we may continue to see strong job gains for a few months to come, the party will soon be over,” North said.
Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at [email protected] and sign up for our free Daily Money newsletter for personal finance tips and business news Monday through Friday mornings.