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First Cut: September job openings fewer, but still abundant; hiring still active; layoffs a little higher

The data on Job Openings and Labor Turnover (JOLTS) for September looks a bit stale after the October Employment Situation. However, it suggested that the labor market has cooled a bit as businesses have started to pare the number of open positions which in turn could mean that the labor market is feeling the effects of concerns about a possible recession, or at least that growth will be slow enough that new jobs will be less plentiful.

The level of job openings in September fell 277,000 to 7.024 million, its lowest since 6.894 million in March 2018. This is far from a weak reading. Firms are simply scaling back on the number of new jobs. The openings rate fell two-tenths to 4.4% in September, its lowest since 4.4% in March 2018.

The number of new hires rose a relatively modest 50,000 to 5.934 million in September but was among the better readings for 2019 to-date. The rate was unchanged at 3.9% in September.

The level of separations was up in September by 76,000 to 5.808 million, well within the normal month-to-month variation and with no particular hint that layoffs are more widespread. The rate was unchanged at 3.8% for the month.

Net turnover — hires minus separations — was up 126,000 in September. There has been a downward trend in recent months pointing to moderation in hiring, but from elevated levels.

The number of workers voluntarily quitting jobs — a component of separations — fell 103,000 to 3.498 million in September and was down for a second month in a row. It would be overstating the case to say that workers are feeling less secure about changing employment. What may be more true is that the migration of workers seeking better pay and/or benefits may have passed its peak. The rate was down a tenth to 2.3% in September and this remained in line with conditions in place for over a year.

The Beveridge Curve — which maps the national unemployment rate against the rate of job openings did show a small break away from the cluster of recent readings but nothing that hinted at any real slack developing in the labor market.


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