Job Openings Fall in August; Hiring Remains on Record Pace

By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • Job openings at the end of August FELL 0.9 percent from July to 6.08 million – but the level was 10.8 percent ahead of a year earlier, the strongest year-year jump in 17 months;
  • Hiring FELL 6.3 percent in August, down 91,000 from July;
  • The ratio of unemployed to job opening in May EDGED UP to 1.17 in August highest since May;
  • 12 million workers quit their jobs in August, down from 3.19 million in July.

Image result for job openings and labor turnover survey

In advance of two stormy months, the US labor picture tightened in August as both the number of job openings and new hires declined, the Bureau of Labor Statistics reported Wednesday in its monthly Job Openings and Labor Turnover Survey (JOLTS).  That the report showed the jobs opening rate in August, 4.0 percent, was unchanged from July.

The job openings rate, according to the BLS, is computed by dividing the number of job openings by the sum of employment and job openings and multiplying that quotient by 100.

Job openings at the end of July exceeded hires in August for the 20th straight month suggesting a skills gap with employers unable to find the right candidates for jobs. The gap suggests higher wages to come as employers remain under pressure from a tight labor market.

The report reflects job openings at the end of the month which means it likely did not pick up openings which may have resulted from Hurricane Harvey as it ripped through Texas.

The JOLTS report tracks the ins and outs of the labor market as contrasted with the BLS Employment Situation report which reports net changes. Differences can result though as the same individual can be counted in more than one category.

Despite the decline in job openings at the end of August, businesses Shed 33,000 jobs in September the first time US payrolls have contracted in seven years (September 2010). Nonetheless, the pace of hiring through August suggest 64,300 hires this year which would be the most since the JOLTS report began in 2001. According to the BLS, a “job opening” means a specific position exists and there is work available for that position, full-time or part-time. The job can be permanent, short-term, or seasonal and there is active recruiting for workers from outside the establishment location that has the opening. Openings for positions with start dates more than 30 days in the future are not included in the job openings count for a specific month.

You can hear Mark Lieberman on P.O.T.U.S Morning Briefing (Sirius 124) every Friday at 6:20 am Eastern Time. Follow him on Twitter at @foxeconomics.

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