The tight job market has been a recurring theme since the pandemic. As employers struggled to find and retain employees, wages have increased accordingly. Workers did not hesitate to quit when their position was less than satisfactory, confident that they could find another position, often accompanied by a raise. This situation may soon come to an end.
For the first time since June 2021, the number of available positions decreased to about 10.1M in August from 11.2M in July, according to the latest Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS. This marks the biggest one-month decline since April 2020 in the early days of the pandemic. The largest decreases in job openings were in health care and social assistance, followed by other services and retail.
There were still 1.7 jobs available for every unemployed person in August, down from two in July, indicating that the job market remains strong. Dissatisfied workers are still confident that they can find employment elsewhere, with 4.2M people quitting voluntarily in August up slightly from 4.1M in July. Although layoffs rose in August to 1.5M up from 1.4M in July, attaining their highest level since March 2021, they remain historically low. Since hires remain stable at a rate of 4.1%, the decline in job openings could be a sign that some employers are withdrawing their job postings rather than filling them.
Good News For the Fed
Although it is still too early to cry victory, a more balanced job market is exactly what the Fed has been looking for as a signal to slow their aggressive interest-hike policy as a means to fight back against inflation.
Nevertheless, another interest hike is still likely at the Fed’s upcoming meeting. “Even as higher interest rates and inflation, and weaker business and consumer confidence are beginning to tamp down labor market activity, the labor market still remains healthy,” said Sophia Koropeckyj, a senior economist at Moody’s Analytics. “We expect that the Fed is not yet ready to pause.”
As always, we’ll keep you updated on further developments. In the meantime, if you’d like more information about buying/selling or refinancing in today’s market, give us a call or drop us an email.
