The number of available jobs in the U.S. plummeted in August compared with July as businesses grow less desperate to hire workers, a trend that could cool chronically high inflation.
There were 10.1 million advertised jobs on the last day of August, the Bureau of Labor Statistics said Tuesday, down a huge 10% from 11.2 million openings in July. In March, job openings had hit a record of nearly 11.9 million.
Layoffs ticked up in August but remained at a historically low level. And slightly more people quit their jobs.
The sharp drop in job openings will be welcomed by the Federal Reserve which believes that boosting the nation's unemployment could cool inflation. The Fed forecasts the unemployment rate to rise to 4.4% next year, from 3.7% today — a number that implies an additional 1.2 million people losing their jobs.
Fed officials have cited the high level of openings as a sign of strong labor demand that has compelled employers to steadily raise pay to attract and keep workers.
Friday's jobs report
Analysts, however, attribute the lower numbers to a general state of unpredictability.
"To be clear these changes are all pretty small and display general series volatility," Elise Gould, senior economist with the left-leaning Economic Policy Institute, wrote in response to the August Job Openings and Labor Turnover Survey (JOLTS) report.
She added, "The drop in job openings is the big story today, but remember that we've already seen the data on net job growth for August and it was strong, with 315,000 jobs added and an increase in labor force participation."
Tuesday's figures arrive the same week that a key report on jobs and the unemployment rate is set to be released Friday. Economists forecast that it will show that employers added 250,000 jobs in September and that the unemployment rate remained 3.7% for a second straight month.
Smaller pay raises, if sustained, should ease inflationary pressures. In its effort to combat the worst inflation in 40 years, the central bank has raised its key short-term interest rate to a range of 3% to 3.25%, up sharply from nearly zero as recently as March.
Chair Jerome Powell and other Fed officials hope that their interest rate hikes — the fastest in roughly four decades — will cause employers to pull back on their efforts to hire more people. Fewer job openings, in turn, could reduce the pressure on companies to raise pay to attract and keep workers.
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