WASHINGTON D.C.: In August, U.S. job openings fell by the highest level in nearly two and a half years, indicating that the labor market was beginning to cool amidst higher interest rates, aimed at reducing demand and curbing inflation.
In a report issued this week, vacancies remained above 10 million for the 14th consecutive month, despite the fifth straight month of falling job openings this year, according to the U.S. Labor Department in its Job Openings and Labor Turnover Survey.
In August, 1.7 job were available for every unemployed person, down from two jobs in July, and redundancies also remained low, indicating a still-tight labor market, which will encourage the Federal Reserve to continue its aggressive monetary policy tightening.
Sophia Koropeckyj, a senior economist at Moody's Analytics in Westchester, Pennsylvania, said, "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," as quoted by Reuters.
On the last day of August, job openings dropped 1.1 million to 10.1 million, the lowest level since mid-2021. Economists polled by Reuters predicted there would be 10.775 million U.S. job vacancies.
August's decline was the largest since April 2020, when the U.S. economy was suffering from the repercussions of the COVID-19 pandemic.
All four U.S. regions saw declines, most notably the Midwest. Job openings fell to a rate of 6.2 percent from 6.8 percent in July, while hiring increased steadily at 4.1 percent.
"The Fed will welcome this apparent decline in excess demand for labor, in the hope that it eases wage pressures," said Conrad DeQuadros, senior economic advisor at Brean Capital in New York, as quoted by Reuters.
In July, the number of people voluntarily quitting their jobs climbed to 4.2 million from 4.1 million.
"The heat of the labor market is slowly coming down to a slow boil, as demand for hiring new workers fades," added Nick Bunker at Indeed Hiring Lab, according to Reuters.