Source: Economics Group of Wells Fargo Bank, N.A.Summary
Job openings and turnover data for August served as a reminder that in level terms, the U.S. labor market is holding up, but it is still in a fragile position. Job openings partially rebounded to 8.04 million in August, and the ratio of jobs per unemployed workers ticked modestly higher to 1.13. The bounce in these measures offers some comfort that labor demand is not yet deteriorating in a non-linear way. That said, beneath the surface, turnover in the labor market (i.e., new hiring and workers quitting their current jobs) has stalled out to levels reminiscent of the early to mid-2010s. The good news is that layoffs & discharges remain historically low, but given the background of materially weaker demand for new workers compared to last year or even just six months ago, separations need to stay low to avoid a marked slowdown in net hiring. All eyes will now turn to Friday’s September employment report to see if August’s rebound in payrolls and the unemployment rate were the first signs of the labor market stabilizing or just a temporary breather in the softening trend.