Job Openings Plunge in September, Signaling Labor Market Slowdown Ahead of Fed Decision

New York, NY – Job openings unexpectedly dropped in September, indicating a potential slowdown in the labor market as the Federal Reserve prepares for its upcoming interest rate decision on Nov. 7. According to the Bureau of Labor Statistics, job openings decreased to 7.44 million at the end of September, the lowest level since January 2021. This decline followed August’s revised figure of 7.86 million, which was initially reported at 8.04 million. Economists projected 8 million job openings for September.

The Job Openings and Labor Turnover Survey (JOLTS) also revealed an increase in hires to 5.55 million in September, up from 5.43 million in August. The hiring rate slightly rose to 3.5% in September, indicating a stable labor market. However, the data suggests a cooling of labor demand and less absorption of labor supply. The quits rate, a measure of worker confidence, fell to 1.9% in September, signaling a decline in employment opportunities.

Economists interpret the low quits rate as a reflection of weakening wage growth and a reduction in inflationary pressures in the labor market. The recent data aligns with reports from districts in the October Fed Beige Book, indicating low worker turnover and limited layoffs. Hiring activities have focused on replacements rather than expansion. The upcoming October jobs report is anticipated to show a significant drop in job gains compared to September’s figures, attributed to weather disruptions and labor strikes affecting payroll numbers.

Overall, the latest job market data suggests a shift towards a more subdued labor market environment, with a slight decrease in job openings and a steady hiring rate. Economists are closely monitoring these trends as they anticipate the Federal Reserve’s decision on interest rates in November.