US job openings fell in August, while layoffs remained low, suggesting that the labor market continues to show signs of stability.
According to the Labor Department’s Bureau of Labor Statistics, job openings dropped by 256,000 to 7.079 million on the final business day of August. The figures were published Tuesday in the latest Job Openings and Labor Turnover Survey, also known as the JOLTS report.
Meanwhile, July’s figure was revised higher to 7.335 million vacancies from the previously reported 7.271 million.
Job Openings Miss Economists’ Forecast
Economists surveyed by Reuters had expected 7.225 million job openings in August.
The job openings rate also slipped to 4.3%, down from 4.4% in July.
However, some economists have raised concerns about the reliability of the JOLTS survey because its response rate has fallen considerably compared with levels seen before the COVID-19 pandemic.
Despite those concerns, many economists believe the US labor market has regained some stability after experiencing weakness during much of the summer.
US Payroll Growth Shows Signs of Improvement
Nonfarm payrolls increased by 162,000 jobs in August, marking the strongest monthly gain in five months.
A Reuters survey of economists expects payroll growth to slow to around 90,000 jobs in September. The unemployment rate is forecast to remain unchanged at 4.1%.
The September employment report is scheduled for release on Friday and will provide investors with another important update on the health of the US labor market.
Federal Reserve Keeps Focus on Inflation
Greater labor market stability could give the Federal Reserve more room to concentrate on inflation pressures.
The US central bank recently increased its benchmark overnight interest rate by 25 basis points to a range of 3.75% to 4.00%. It was the first rate increase in three years.
Federal Reserve officials also signaled that additional increases in borrowing costs could follow in the coming months.
Financial markets were pricing in approximately a 70.3% probability of another rate increase in October, according to CME’s FedWatch tool.
Hiring Rises While Layoffs Decline
Hiring increased by 46,000 to 5.192 million in August. The hiring rate rose to 3.3%, compared with 3.2% in July.
At the same time, layoffs and discharges fell by 61,000 to 1.641 million. The layoffs rate declined to 1.0% from 1.1% in the previous month.
Low layoffs remain one of the main factors supporting the labor market. However, employers continue to show caution when it comes to expanding their workforce.
Energy Prices Add Pressure to the US Economy
Some economists have linked weaker hiring confidence to uncertainty surrounding the US-Israeli conflict with Iran, which has contributed to higher energy prices and increased inflation pressures.
Diesel prices have also climbed to record levels. Economists have warned that higher fuel costs could place additional pressure on businesses, consumers and the broader US economy.
