US Job Openings Top All Forecasts as White-Collar Positions Jump

US job openings unexpectedly increased in August, fueled by a surge in white-collar postings, highlighting the durability of labor demand.

(Bloomberg) — US job openings unexpectedly increased in August, fueled by a surge in white-collar postings, highlighting the durability of labor demand. 

The number of available positions increased to 9.61 million from a revised 8.92 million in July, the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey, or JOLTS, showed Tuesday. Hiring edged up, while layoffs remained low.

The level of openings topped all estimates in a Bloomberg survey of economists. Treasury yields rose and the S&P 500 declined after the report.

The so-called quits rate, which measures voluntary job leavers as a share of total employment, held at 2.3%, matching the lowest since 2020. Fewer quits implies Americans are less confident in their ability to find another job in the current market.

The pickup in openings reflected a more than half-million increase at professional and business services as well as more postings in finance and insurance, education and non-durable goods manufacturing. 

The rebound in vacancies points to how resilient demand is underpinning staffing needs. While an improvement in workforce participation and consistent wage increases have helped ease worker shortages, challenges remain.

The ratio of openings to unemployed people was little changed at 1.5. At its peak in 2022, the ratio was 2 to 1.

The Federal Reserve is closely watching the progress of the re-balancing happening in the labor market. Central bank officials expect this trend to continue, helping to ease price pressures. Persistent strength in the job market, however, could lead the Federal Open Market Committee to pursue another rate hike.

“With job openings remaining well above levels recorded prior to the pandemic and moving in the wrong direction in August, these data support a higher for longer message on rates from the Fed and will likely keep the FOMC open to another rate hike this year,” Rubeela Farooqi, chief US economist at High Frequency Economics, said in a note.

Data out last week showed a key gauge of underlying inflation rose in August at the slowest monthly pace since late 2020.

Hiring Pace

Hires increased for the first time in three months, but barely so and remain below levels seen earlier this year. The gain reflected a pickup in accommodation and food services. Meanwhile, the low level of layoffs shows how companies remain reluctant to discharge employees.

The data precede Friday’s monthly jobs report, which is currently forecast to show employers added 170,000 jobs in September. The unemployment rate is expected to decrease slightly after a pickup in participation in August boosted the measure in the prior period. 

What Bloomberg Economics Says…

“August’s surge in job openings does little to change our view that the labor market is loosening. Skills mismatch appears to be an increasingly difficult problem for firms with job openings, as hiring and wage growth have been slowing even with vacancies still high. We expect the Fed to look at the larger trend across a host of labor-market indicators, which indicate softening.”

– Stuart Paul

For the full note, click here

Some economists have questioned the reliability of the JOLTS statistics given the survey’s low response rate. That skepticism has been compounded by stories of employers “ghosting” jobseekers, a function of firms posting jobs they don’t actually intend to fill.

–With assistance from Augusta Saraiva and Chris Middleton.

(Adds Bloomberg Economics comment)

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