the staff of the Ridgewood blog
Ridgewood NJ, it’s becoming increasingly difficult for Americans to secure a job, as the latest data from the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS) shows a concerning decline in job openings.
In July, the total number of job openings dropped to 7.67 million, down from a revised 7.91 million in June. This is the lowest figure since early 2021, falling short of consensus estimates.
Meanwhile, layoffs surged to 1.76 million, the highest level since March 2022, signaling growing instability in the labor market.
Worsening Job Market Ratios
A key metric for economists and central bankers is the ratio of available jobs per unemployed worker. In July, this figure fell to 1.1, its lowest since 2021 and a sharp contrast to the 2-to-1 ratio seen during 2022’s stronger job market.
The hiring rate showed a modest improvement at 3.5%, up slightly from June’s 3.3%, but overall sentiment remains cautious. The quit rate—often viewed as a measure of worker confidence—dropped to 2.1%, which economist Guy Berger of the Burning Glass Institute said reflects a labor market similar to that of late 2016 to early 2017.
However, Berger warns that unlike that period of gradual improvement, we are now moving in the opposite direction.
Economic Concerns Mount
The JOLTS report aligns with growing concerns from Federal Reserve officials and economists that the labor market is softening.
Mark Hamrick, Senior Economic Analyst at Bankrate, echoed these worries, saying, “As Chairman Jerome Powell said recently, further cooling of the job market is unwelcome. But that is exactly what the JOLTS update conveys.”
Adding to the uncertainty, the government revised its job growth data in August, lowering the non-farm payroll count by 0.5%, or 818,000 jobs, in the 12 months leading to March 2024.
Market Reaction
Stocks tumbled on Wednesday in response to the report, extending a broader decline. However, the bond market saw more notable shifts, with Treasury yields dropping. The yield on the two-year note dipped below the 10-year yield for only the second time since 2022, reigniting concerns over a potential recession.
“This softening of labor conditions has yield watchers dialing up the odds of a half percentage point reduction at the Fed’s next meeting on September 18,” said Jose Torres, Senior Economist at Interactive Brokers.
Many on Wall Street view the inverted yield curve as a harbinger of recession. Though it’s been inverted for a record 27 months without a significant economic slowdown, even brief corrections like this one are worth noting.
Looking Ahead
Further signs of labor market weakness could arrive soon, with the August jobs report due on Friday. This report could heighten recession fears and put additional downward pressure on short-term yields.
Morgan Stanley analyst Sam Coffin points out that seasonal job trends for August don’t look promising. Excluding the pandemic years, August has seen a slowdown in 15 out of 19 years, with an average shortfall of 30,000 jobs.
As the job market continues to show signs of cooling, all eyes will be on the upcoming data to gauge whether the economy is heading toward a more severe downturn.
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Thank you Harris/Biden!
But Kamala says the opposite.
She doesn’t know what she is saying … she just reads what is placed in front of her by her handlers
Kamala helped create this economy, so she knows how to fix it!
Kamala stoopid. Good at horizontal hugging.
https://abcnews.go.com/Technology/wireStory/verizonn-buying-frontier-20b-deal-helps-bolster-fiber-113410543
You guys are so dumb. Don’t worry. We’ll just offset this by creating more government jobs, which we can fund by raising taxes on all those nasty rich people who make $100k a year.