The numbers: Job openings in the U.S. fell sharply to 10.1 million in August and touched the lowest level since last fall, a sign the red-hot labor market might be cooling off a bit as interest rates rise and the economy slows.
Job listings slid from 11.2 million in July to mark the second largest monthly drop ever, the Labor Department said Tuesday. It’s the first time openings have fallen below 11 million since November 2021.
The number of job openings is viewed as a way to assess the strength of the labor market and the broader economy. While it isn’t sizzling as much as it was earlier in the year, the labor market is still quite strong.
The number of jobs being filled, for instance, rose slightly to 6.28 million from 6.24 million. Hiring had declined for five months in a row until August.
The number of job quitters also rose to 4.16 million from 4.06 million and was not far from the all-time high. People quit more often when they think it’s easy to get a better job.
Big picture: The U.S. economy is starting to sputter as the Federal Reserve jacks up interest rates to try to extinguish high inflation.
Businesses have cut back on hiring and are likely to continue to do so as the economy slows. Most economists predict unemployment will start to rise from the current level of 3.7%.
Yet the tightest labor market in decades could deter most companies from major layoffs given how hard it is to fill open jobs . They might want to hold onto most of their workers so long as the economy doesn’t fall into a ditch.