In August, U. S. job openings rose slightly, while hiring went down, reflecting a weak labor market that may lead the Federal Reserve to cut interest rates again next month, despite strong consumer spending. A survey showed that households are becoming more pessimistic about job availability, with the percentage of people seeing jobs as “plentiful” dropping to its lowest since early 2021. The job openings-to-unemployed ratio fell from 1.0 in July to 0.98 in August.
The easing labor market results from reduced demand for workers, influenced by uncertainties from tariffs and the rise of artificial intelligence. An immigration crackdown has also limited labor supply. Job openings increased by 19,000 to 7.227 million by the end of August, surpassing economists’ expectations. However, a government shutdown may delay the release of future economic data, including September’s employment report.
Job openings decreased in construction but saw increases in accommodation, food services, and retail. Federal job openings fell due to spending cuts, while the overall job openings rate stayed at 4.3%. Hiring decreased by 114,000, mainly in trade, transportation, and utilities, with fewer new hires in accommodation and food services likely linked to immigration raids.
The layoffs dropped as employers retained workers, with the layoffs rate unchanged at 1.1%. Despite fewer layoffs, weak hiring suggests job seekers may struggle to find new opportunities. The Conference Board survey indicated that the view of jobs as plentiful fell to 26.9%, the lowest since February 2021. The unemployment rate rose to 4.3% in August, nearing a four-year high, while nonfarm payroll growth averaged only 29,000 jobs monthly over the last three months.
Economists expect the Fed to focus on labor market conditions going forward, with a projected increase of around 50,000 jobs for September. The unemployment rate is expected to remain steady at 4.3%.
With information from Reuters