Job Openings Decline in August, Continuing Downward Trend
The latest Job Openings and Labor Turnover Survey from the Bureau of Labor Statistics shows the number of open positions in the private sector fell to 6.320 million in August (see chart). Total job openings dropped to 7.051 million. Private-sector openings are down in six of the past nine months since the peak in November 2018, a drop of 642,000 or 9.2 percent. The job-openings rate, openings divided by the sum of jobs and openings, was 4.7 percent for the private sector, down from 4.8 percent last month and a peak of 5.2 percent in November (see chart). Though the level of openings remains high by historical comparison, the downward trend in job openings suggests employers may be getting more cautious about future business prospects, a possibility supported by the most recent monthly small business survey from the National Federation of Independent Business.
The industries with the largest number of openings were professional and business services (1.23 million), health care (1.15 million), leisure and hospitality (898,000), and retail (804,000). The highest openings rates were in professional and business services (5.4 percent), health care (5.3 percent), and accommodation and food services (5.2 percent).
While private-sector openings declined, so did private-sector layoffs. Layoffs fell slightly to 1.686 million from 1.698 million in the prior month. The layoffs rate held at 1.3 percent. Though slightly above the all-time low of 1.2 percent, it is well below the 2.3 percent peak rate in 2009. The low layoffs rate is consistent with the multidecade-low level of initial claims for unemployment insurance. Despite the drop in job openings, employers are not cutting employees, suggesting caution not panic.
Quits by private-sector employees ticked down in August, dropping to 3.526 million from 3.668 million in July. The quits rate also ticked down, falling to 2.6 percent from 2.7 percent last month and just below the record high of 2.8 percent from 2001 (see chart).
Overall, the data relating to the labor market are still relatively strong by historical comparison, but many measures have shown significant deterioration in recent months. The weakness may be a sign that erratic and incoherent policy is undermining confidence in the economic outlook. Still, attracting and retaining qualified labor is likely to remain a critical issue for business in the immediate future.
Robert Hughes
Robert Hughes joined AIER in 2013 following more than 25 years in economic and financial markets research on Wall Street. Bob was formerly the head of Global Equity Strategy for Brown Brothers Harriman, where he developed equity investment strategy combining top-down macro analysis with bottom-up fundamentals. Prior to BBH, Bob was a Senior Equity Strategist for State Street Global Markets, Senior Economic Strategist with Prudential Equity Group and Senior Economist and Financial Markets Analyst for Citicorp Investment Services. Bob has a MA in economics from Fordham University and a BS in business from Lehigh University.
