US job openings fell in August, but layoffs remained low, pointing to a stable labor market.
Job openings, a measure of labor demand, had dropped by 256,000 to 7.079 million by the last day of August, the Labor Department’s Bureau of Labor Statistics said in its Job Openings and Labor Turnover Survey, or JOLTS report, on Tuesday. Data for July was revised higher to show 7.335 million vacancies instead of the previously reported 7.271 million.
Economists polled by Reuters had forecast 7.225 million open positions in August. The job openings rate fell to 4.3% from 4.4% in July. The JOLTS report has been plagued by a low response rate, which has decreased considerably from prior to the COVID-19 pandemic, a concern among some economists.
Most view the labor market as having regained its footing after struggling through much of the summer.
Nonfarm payrolls increased by 162,000 jobs in August, the most in five months. A Reuters survey of economists expects nonfarm payrolls to have advanced by 90,000 in September, with the unemployment rate forecast to have held steady at 4.1%. September’s employment report will be published on Friday.
Labor market stability gives the Federal Reserve scope to focus on inflation. The U.S. central bank this month raised its overnight benchmark interest rate by 25 basis points to the 3.75%-4.00% range, the first hike in three years, and flagged further increases in borrowing costs in the months ahead.
Financial markets are pricing in a roughly 70.3% chance of another rate increase in October, CME’s FedWatch tool showed.
Hiring rose 46,000 to 5.192 million. The hires rate increased to 3.3% from 3.2% in July. Layoffs and discharges dropped by 61,000 to 1.641 million, with the rate dipping to 1.0% from 1.1% in July.
Historically low layoffs are mostly driving labor market stability, with employers reluctant to ramp up hiring. Economists blamed uncertainty from the US-Israeli war with Iran, which has boosted energy prices and driven up inflation.
Diesel prices have surged to record highs and economists have warned it will undercut the economy.
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci)
